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Issues:
1. Assessment of income for two different periods. 2. Penalty imposition under section 273 for wrong estimate of advance tax. 3. Calculation and correction of penalty amount by Appellate Authority. Analysis: 1. The appeal was filed by the Revenue against the order of the AAC regarding the assessment of income for an assessee-firm dealing in salt-petre for the assessment year 1971-72. The assessee had filed two separate returns for different periods due to a change in partners, but the Income Tax Officer (ITO) made only one assessment as per section 187(2). The total income was initially determined at Rs. 2,38,850 but after appeals, it was assessed at Rs. 1,64,150. The issue of separate assessments for two periods was raised in the appeal. 2. Penalty proceedings under section 273 were initiated against the assessee for filing a wrong estimate of advance tax. The ITO levied a penalty of Rs. 1,870 under section 273, which the assessee appealed to the AAC. The assessee argued that the estimate filed was for the first period and there was no wrong estimate for that period. The AAC upheld the penalty but directed it to be calculated based on the tax payable for the second period, resulting in a penalty of Rs. 1,115. The correctness of penalty imposition and calculation was a key issue in this part of the judgment. 3. The Appellate Tribunal noted that the penalty was levied under section 273(a), and there was a mistake in the calculation of penalty by the ITO. The correct penalty amount should have been Rs. 616 as per the provisions of section 273(i)(1) and (2). The Tribunal held that since the penalty imposed by the AAC exceeded the correct penalty amount, no part of the penalty needed to be restored. The appeal was deemed to be dismissed for statistical purposes, concluding the judgment on the penalty calculation issue.
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