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Issues involved: Appeal against order of penalty under s. 273 of the I.T. Act, 1961 for under-estimating profits while paying advance tax; Challenge of penalty notice issued under s. 273 based on reassessment under s. 147 of the Act.
Summary: The appeal concerned the challenge of a penalty notice issued under s. 273 of the I.T. Act, 1961, based on reassessment under s. 147 of the Act. The court considered whether the reassessment under s. 147 could be equated with a "regular assessment" under s. 143 or s. 144 for the purpose of imposing a penalty under s. 273. The appellant relied on a previous court decision to argue that reassessment should be considered a regular assessment. However, the court held that the provisions of the Act clearly distinguish between regular assessment and reassessment. The court pointed out that s. 148 specifically refers to assessment, reassessment, or recomputation under s. 147 as distinct from assessments under s. 143 or s. 144. Additionally, other provisions of the Act, such as time limits for assessments and appeals, treat reassessment under s. 147 separately. The court emphasized that the term "regular assessment" in s. 273 should not be interpreted to include reassessment under s. 147 based on the legislative definitions and canons of construction. The court also noted that previous decisions by various High Courts supported the interpretation that reassessment under s. 147 should not be considered a regular assessment for the purposes of s. 273. The court dismissed the appeal, upholding the decision to quash the penalty notice issued based on reassessment under s. 147. The respondent was awarded costs for the appeal.
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