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Commissioner of Income-tax Vs. Ram Singh Harmohan Singh - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtPunjab and Haryana High Court
Decided On
Case NumberIncome-tax Reference No. 64 of 1975
Judge
Reported in[1980]121ITR381(P& H)
ActsIncome Tax Act, 1961 - Sections 139(1), 148 and 271(1)
AppellantCommissioner of Income-tax
RespondentRam Singh Harmohan Singh
Appellant Advocate D.N. Awasthy and; B.K. Jhingan, Advs.
Respondent Advocate Bhagirath Dass,; S.K. Heeraji and; B.K. Gupta, Advs.
Excerpt:
- sections 80 (2) & 89 & punjab motor vehicles rules, 1989, rules 85 & 80: [t.s. thakur, cj, jasbir singh & surya kant, jj] appeal against orders of state or regional transport authority imitation held, a stipulation regarding the period of limitation available for invoking the remedy shall have to be strictly construed. that is because any provision by way of limitation is in the nature of a restraint on the remedy provided under the act. so viewed two inferences are clear viz., (1) sections 80 and 89 of the act read with rule 85 of the rules make it obligatory for the authorities making the order to communicate it to the applicant concerned and (2) the period of limitation for any appeal against the order is reckonable from the date of such communication of the reasons would imply..........of the act the assessee filed another return on february 19, 1969, which was an exact copy of the return filed by it on april 21, 1967, under section 139 of the act.7. on behalf of the revenue, it is contended that a return filed in response to a notice under section 148 of the act, if found to be false, also attracts the provisions of section 271(1)(c) on the plain language of the statute. on the other hand, it has been contended on behalf of the assessee that the assessment relates to a particular year and whether an assessee has concealed the particulars of income or has furnished inaccurate particulars of such income can only be determined with reference to the original return filed by the assessee for the purpose of assessment of income-tax for that year, and the default, if any,.....
Judgment:
ORDER

M.R. Sharma, J.

1. In this reference under Section 256(1) of the Income-tax Act, 1961 (hereinafter called ' the Act '), the Income-taxAppellate Tribunal, Amritsar Bench, has referred the following question to us for opinion :

' Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the provisions of Section 271(1)(iii) as existing before its amendment with effect from April 1, 1968, would be applicable to the present case '

2. During the course of assessment proceedings for the assessment year 1963-64 of M/s. Ram Singh Harmohan Singh, Amritsar (hereinafter referred to as ' the assessee '), the ITO included towards the total income of the assessee the following amounts which appeared as cash credits in the books of accounts of the assessee :

Rs.

(i) M/s. Amir chand Moti Ram 42,000

(ii) M/s. B. Mohan Singh & Sons 20,000

(iii) Interest in the name of M/s. Amir chand Moti Ram 2,075

3. The said officer issued penalty notice under Section 271(1)(c) of the Act for concealment of income and since the minimum penalty imposable exceeded a sum of Rs. 1,000, he referred the case to the IAC of Income-tax under Section 274(2) of the Act. On appeal, the AAC reduced the addition in the account of M/s. Amir Chand Moti Ram to a sum of Rs. 17,000 but maintained the addition of Rs. 20,000 in the account of M/s. B. Mohan Singh & Sons and the addition of interest amounting to Rs. 2,075 in the account of M/s. Amir Chand Moti Ram.

4. The IAC, vide his order dated March 15, 1971, after allowing the assessee an opportunity of being heard, imposed a penalty of Rs. 38,592 on the assessee under Section 271(1)(c) of the Act.

5. Aggrieved by the order of the IAC, the assessee went up in appeal before the Income-tax Appellate Tribunal. The said Tribunal held that no penalty was imposable in respect of the cash credit of Rs. 17,000 in the account of M/s. Amir Chand Moti Ram as this addition had been deleted by the Appellate Tribunal. The penalty leviable in respect of the addition of Rs. 20,000 being the cash credit in the account of M/s. B. Mohan Singh and Sons was, however, maintained. Regarding the quantum of penalty, the Tribunal found that the original return of the income had been filed by the assessee before April 21, 1967, and as such the penalty provisions as existing before April 1, 1968, were applicable to the case. In this view of the matter, the Tribunal fixed the penalty at 30 per cent. of the tax sought to be avoided on the income finally determined in the appeal.

6. It is common ground between the parties that if the return of the assessee in which the income is alleged to have been concealed had beenfiled prior to April 1, 1968, the penalty imposable would have reference to the amount of tax sought to be avoided, and in case the return had been filed after the aforementioned date, the penalty imposable would have reference to the income sought to be concealed. It is also not disputed that in response to a notice under Section 148 of the Act the assessee filed another return on February 19, 1969, which was an exact copy of the return filed by it on April 21, 1967, under Section 139 of the Act.

7. On behalf of the revenue, it is contended that a return filed in response to a notice under Section 148 of the Act, if found to be false, also attracts the provisions of Section 271(1)(c) on the plain language of the statute. On the other hand, it has been contended on behalf of the assessee that the assessment relates to a particular year and whether an assessee has concealed the particulars of income or has furnished inaccurate particulars of such income can only be determined with reference to the original return filed by the assessee for the purpose of assessment of income-tax for that year, and the default, if any, was committed on the date when that return is filed and the penalty provisions in force on that date only are attracted.

8. It was further submitted that Sections 146 and 147 of the Act are in pari materia with Order 9, Rule 13, and Order 47, Rule 1, of the CPC, which entitle a civil court to set aside an ex parte decree and to review a judgment on the discovery of new and important matter or evidence which, after exercise of due diligence was not within the knowledge of a party, respectively. The argument raised is that once an assessment is reopened, the original cause whether the original return filed contained correct particulars of income or not became alive and the finding regarding the submission of wrong particulars has to be given on the basis of such original return. In support of this submission, reliance is placed on CIT v. Gopal Krishna Singhania : [1973]89ITR27(All) .

9. On behalf of the revenue, our attention is drawn to a Division Bench judgment of this court in Smt. Kamla Vati v. CIT , in which it was held that the words ' regular assessment ' appearing in Section 273 of the Act did not take in its ambit reassessment contemplated under Section 147 of the Act. It is submitted that if proceedings under Section 147 are separate proceedings, any return filed pursuant to a notice under Section 148 of the Act would attract the penalty provisions contained in Section 271(1)(c) of the Act. In that case, however, the attention of the Division Bench was not drawn to Gopal Krishna's case : [1973]89ITR27(All) . The matter is not free from difficulty and is likely to arise in a large number of cases and in our opinion can more properly be decided by a Full Bench. We, accordingly, direct that orders of hon'ble the Chief Justice may be obtained in this regard,


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