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TMI Blog1985 (6) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... be closed because of certain unavoidable circumstances. For the assessment year 1971-72, its explanation was that the audit of the accounts was not completed and that it was completed only on23-4-1973. However, the ITO did not accept these explanations and levied penalties of Rs. 19,327 and Rs. 34,568 at the rate of 2 per cent per month and restricted to 50 per cent of the tax. 3. On appeal, before the learned Commissioner (Appeals), firstly, it was stated that the penalties were barred by limitation. This contention was not accepted by the learned Commissioner (Appeals). On merits, the learned Commissioner (Appeals) held that so far as the assessment year 1970-71 was concerned, the auditor's certificate was dated 8-10-1971 and that even after the accounts had been audited the return was filed late by about a year for which no cause whatsoever had been shown. Even for the earlier period, the learned Commissioner (Appeals) held that it had not been indicated as to what the unavoidable circumstances were. So far as the assessment year 1971-72 is concerned, the learned Commissioner (Appeals) observed that it was not indicated as to why the audit of the accounts could not be complet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n for interest and, thus, the original order of assessment continued to survive leaving no room for a fresh order under section 143(3). He also pointed out that in the original assessment orders for both the years, penalty proceedings under sections 271(1)(a) and 273 had been initiated and, therefore, there was no further occasion to again initiate proceedings in giving effect to the order of the IAC. He argued that the fact that income had to be recomputed in accordance with the order of the Tribunal, did not mean that a fresh assessment order had to be passed specially when the Tribunal had itself not stated that the assessment was being set aside as a whole but had decided the issues involved and left certain calculations to be worked out by the lower authorities. Reliance was placed by him in support of the aforesaid arguments on the following decisions---Kooka Sidhwa Co. v. CIT [1964] 54 ITR 54 (Cal.), Addl. CIT v. N.V. Ganapathi Rao [1978] 115 ITR 277 (AP), CIT v. Rajinder Kumar Somani [1980] 125 ITR 756 (Delhi) and S. Gurdial Singh v. WTO [1983] 6 ITD 305 (Delhi). He submitted that the penalty orders were also not passed within six months of the order dated27-3-1981of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 and separate order passed by the AAC for the assessment year 1971-72.24-5-1978Consolidated order passed by the Tribunal in IT Appeal Nos. 1188 and 1189 (Delhi) of 1976-77 for the assessment years 1970-71 and 1971-72. Matter restored to the ITO for the purposes of working out the actual quantum of interest for both the years (vide paragraph Nos. 11 and 20 of that order).27-3-1981Order of the IAC framing assessment separately for both the assessment years in the light of the order of the Tribunal.15-1-1982Order of the Commissioner (Appeals) for the assessment years 1970-71 and 1971-72 against the orders dated27-3-1981of the IAC. While restoring the matter to the ITO for the purposes of working out the actual quantum of interest, the following observations were made by the Tribunal in paragraph Nos. 11 and 20 of its order. Paragraph No. 11 deals with the assessment year 1970-71 and paragraph No. 20 with the assessment year 1971-72: "11. After hearing the parties and on looking into the material on record, we hold: (i) The assessee's accounting being on mercantile basis and there being no dispute on the borrowals from H.B. Swarup, a liability did accrue to the assessee this yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for determining the correct amount of interest. He, therefore, mentioned in that order that assessments were being framed in view of the observations of the Tribunal. We need not go into the details of the finding of the IAC in that regard. In this connection it is also pertinent to notice that appeals were filed by the assessee before the Commissioner (Appeals) against the aforesaid orders dated 27-3-1981 of the IAC which were disposed of by his order dated 15-1-1982 by which income was reduced by Rs. 17,462 for the assessment year 1970-71 and by Rs. 2,891 for the assessment year 1971-72. In the case of Kooka Sidhwa Co., the Calcutta High Court had held that where pursuant to the directions of the Tribunal to revise and amend the assessment, the ITO revises the assessment, the order passed by the ITO partakes the character of a fresh assessment order. In the case of N.V. Ganapathi Rao, the Hon'ble Andhra Pradesh High Court was considering the case of a remand and it is in that context that it held that the period of limitation of two years applied not only to the proceedings which were completed for the first time by the ITO but also to the proceedings that ensured pursuant to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted by the assessee was that of failure to furnish the statement of advance tax. The IAC held that the assessee had committed default under section 273(1)(a), i.e., for furnishing statement of advance tax which it knew or had reason to believe to be untrue. Penalty was levied accordingly in the amount of Rs. 2,899. So far as the assessment year 1971-72 is concerned, the original assessment was completed on10-12-1974and notices were issued among others under sections 273 and 271(1)(a) on10-12-1974. The assessee was given 15 days time to file reply. The notice under section 273 was for failure to file estimate. Thereafter on28-11-1979, fresh notices were issued among others under sections 273 and 271(1)(a) on10-3-1980. On27-3-1981, the assessment order was passed wherein it was mentioned that among other sections, proceedings under sections 271(1)(a) and 273(1)(a) had been initiated. On the same day, separate notices were issued for29-4-1981, under section 271(1)(a) for late filing of the return and also for not filing the estimate. Another notice was issued fixing15-3-1983on which date a combined reply was filed by the assessee. For this assessment year also, the penalty order say ..... X X X X Extracts X X X X X X X X Extracts X X X X
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