1981 (9) TMI 165 - AT - Income Tax

Summary

Issues:
1. Whether penalties under section 273(b) of the Income Tax Act can be levied for failure to furnish advance tax estimates in cases of reassessment under section 147(a).
2. Interpretation of the term "regular assessment" in section 273(b) of the Income Tax Act.
3. Applicability of penalties under section 273(b) in cases of reassessment under section 147(a).

Detailed Analysis:
The judgment pertains to appeals by the Revenue against the CIT (A)'s order regarding penalties imposed on a deceased assessee for failure to furnish advance tax estimates for the years 1961-62 to 1964-65. The Income Tax Officer (ITO) initiated proceedings under section 147(a) due to non-filing of returns by the deceased assessee. Penalties were levied under section 273(b) as the deceased assessee did not provide advance tax estimates. The CIT (A) cancelled the penalties citing that penalties under section 273(b) apply to regular assessments under section 143 or 144, not reassessments under section 147(a) based on legal precedents.

In the subsequent appeal before the Tribunal, the Deptl. Rep. argued that the term "regular assessment" in section 273(b) should encompass assessments under section 147(a) based on various court decisions. However, the legal heirs of the deceased assessee contended that the term "regular assessment" should be interpreted as per the definition in section 2(40) of the Act, which specifies assessments under section 143 or 144 only. They highlighted dissenting views from other High Courts and argued that the penalties were not applicable to reassessments under section 147(a).

The Tribunal analyzed the arguments and legal precedents cited by both parties. It noted conflicting decisions from different High Courts regarding the interpretation of "regular assessment" in section 273(b). Ultimately, the Tribunal upheld the CIT (A)'s order based on the decisions of the Patna and Punjab & Haryana High Courts, which held that reassessments under section 147 cannot be considered as "regular assessments" for the purpose of applying penalties under section 273(b). The Tribunal distinguished the Calcutta High Court decision cited by the Deptl. Rep. and clarified that the other decision referred to by the Deptl. Rep. was not relevant to the current case involving section 273(b).

In conclusion, the Tribunal dismissed the Revenue's appeals, affirming the cancellation of penalties under section 273(b) for failure to furnish advance tax estimates in the case of reassessments under section 147(a).