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Issues: Penalty under section 273(b) of the Income Tax Act for non-filing of estimate under section 212(3) by the assessee.
Analysis: The judgment was delivered by Justice Prem Chand Jain. The case involved the assessee, an individual deriving income from various sources, including partnership in a firm, speculation, and interest on securities. The issue arose when the assessee failed to file an estimate of total income as required under section 212(3) of the Income Tax Act for the assessment year 1965-66. Consequently, penalty proceedings under section 273(b) were initiated upon completion of assessment, resulting in a penalty of Rs. 4,132 being imposed on the assessee. In response to the show-cause notice, the assessee argued that her admission as a partner in the firm was subject to approval by the Company Law Board and that certain income could not be included in the estimate under section 212(3) of the Act. However, the Income Tax Officer was not convinced by this explanation, leading to the imposition of the penalty. The assessee appealed the decision, but both the first appeal and the subsequent appeal before the Tribunal were unsuccessful. The Tribunal rejected the assessee's plea regarding the partnership approval and the speculation income. It held that the assessee should have filed the estimate under section 212(3) despite any doubts or uncertainties in her mind. Consequently, the Tribunal upheld the imposition of the penalty under section 273(b, albeit ordering the levy of the minimum penalty due to certain extenuating circumstances. The assessee then filed an application under section 256(1) of the Act, requesting the Tribunal to refer certain questions of law to the High Court. The High Court, after considering the facts and arguments presented, affirmed the Tribunal's decision regarding the speculation income. It held that the penalty under section 273(b) was justified based on the available material and facts of the case. Therefore, the question referred for decision was answered in favor of the Revenue and against the assessee. No costs were awarded in this case.
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