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Issues:
Assessment of penalty under section 273(b) of the Income Tax Act, 1961 for failure to furnish an estimate of advance tax under section 212(3). Analysis: The judgment pertains to an application by the assessee under section 256(2) of the Income Tax Act, 1961, seeking a reference to the High Court of questions of law arising from the Income-tax Appellate Tribunal's order. The assessee, assessed for the year 1971-72, faced penalty proceedings under section 273(b) for not providing an estimate of advance tax as required by section 212(3) of the Act. The penalty was confirmed by the Appellate Assistant Commissioner (AAC) and later upheld by the Appellate Tribunal. The assessee contended that the penalty was unjustified and excessive, citing a belief that income was below the taxable limit as justification for not filing the advance tax estimate. However, the Tribunal rejected this argument, stating that the assessee's actual assessed income was significantly higher than claimed. The assessee then sought rectification under section 254(2), arguing that the assessment was completed before the deadline for advance tax estimate filing. The Tribunal reduced the penalty but denied the rectification request. The High Court upheld the Tribunal's decision, emphasizing that the new point raised by the assessee post-appeal dismissal was not previously brought before the Tribunal. Citing the Supreme Court's stance in T. S. Balaram, ITO v. Volkart Brothers, the High Court clarified that rectification requires an obvious mistake, not a debatable legal point. As the new fact raised by the assessee was contentious and not previously addressed, the Tribunal's decision to deny rectification was deemed appropriate. Consequently, the High Court dismissed the application under section 256(2) of the Act, with costs imposed on the applicant.
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