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TMI Blog1989 (2) TMI 151X X X X Extracts X X X X X X X X Extracts X X X X ..... were deriving income therefrom which was required to be included in assessee's return of income and advance tax was also to be paid accordingly. Since the assessee neither paid advance tax on that income treating it as his own nor included the income in his return of income, a penalty of Rs. 1,04,340 has been levied under s. 271(1)(c) and a penalty of Rs. 10,000 has been levied under s. 273(a). The assessee preferred appeals against the penalties in question but substantially failed. The CIT(A) merely directed that a relief of Rs. 3,300 given in the quantum appeal be taken into consideration for calculating the penalty. Otherwise the assessee's contention hat the bona fide believed that the income of the minors was not includible in his in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 64 of the IT Act. The learned senior Departmental Representative Shri K.K. Sharma, however, supported the orders of the authorities below. According to him these pleas had been raised before the ITO and the CIT(A); they are without any merit. In the case of partnership firms the assessment has to be completed and share allocation has to be made in terms of s. 67. On that basis the share income of the minor is to be included under s. 64 of the IT Act. 3. We have carefully considered the rival submissions. With regard to the first leg of argument of the learned counsel of the assessee it is seen that such issue came up before the Hon'ble Madras High Court in the case of K. Krishnaveni vs. AAC (1984) 42 CTR (Mad) 290 : (1985) 151 ITR 83 (M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me as includible under s. 64 should be computed. This point is accordingly set aside and the ITO is directed to give reasonable opportunity of being heard to the assessee while redeciding this issue." The aforesaid order of the Tribunal is dt.29th March, 1985while the penalties in question were levied on27th March, 1985. 5. The learned counsel for the assessee on the basis of the aforesaid facts contended that the addition to the assessee's income by way of inclusion of the income arising to the minors had been set aside by the Tribunal and, therefore, on that basis no penalty could be sustained. The learned Departmental Representative on the other hand contended that after the matter was restored by the Tribunal to the ITO, the IAC (Asst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther in the assessments of the concerned partnerships any income had been allocated to the minors under s. 67 of the IT Act, 1961, only such allocated share can be taxed in the hands of the partner or in the hands of a parent of a minor admitted to the benefits thereof. 7. In Dr. Murari Mohan Mukherjee vs. ITO (1988) 72 CTR (Cal) 228 : (1988) 171 ITR 515 (Cal) it has been held by Hon'ble the Calcutta High Court that where the penalty was based on the original assessment order, which had been replaced practically altogether by the appellate order, the penalty proceedings on the basis of the original order could not be continued. The Hon'ble High Court in writ proceedings cancelled a notice issued under s. 271(1)(c). The same view was taken ..... X X X X Extracts X X X X X X X X Extracts X X X X
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