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TMI Blog1991 (3) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under section 275 of the Income-tax Act, 1961 ?" The assessee was assessed in the status of a Hindu undivided family for the assessment year 1965-66, which was completed under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), on March 17, 1970, on a total income of Rs. 1,02,300, on the basis of return which had been filed by the assessee on August 7, 1965, declaring his total income at Rs. 11,093.50, which was later on revised to Rs. 89,318 on August 10, 1967. The Inspecting Assistant Commissioner, on March 24, 1972, levied a penalty under section 271 (1) (c) of the Act on the basis of this assessment. On an appeal having been preferred by the assessee against the assessment, the Tribunal, vide its orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty for concealment. This order was further challenged by the assessee before the Income-tax Appellate Tribunal. When the matter was pending before the Tribunal, the assessee gave up his challenge to the order imposing penalty on merits but pressed his challenge on legal grounds by urging that the order imposing penalty was barred by limitation. It was urged by him that, since the original assessment was completed on March 17, 1970, an order imposing penalty, if any, could have been imposed only within a period of two years from that date. Rejecting his contention, the Tribunal held that, when the original order of assessment was set aside in appeal, earlier proceedings came to an end and the only relevant assessment was the order pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1, 1971, the main section was substituted by the following, but the Explanation remained unaltered: "No order imposing a penalty under this Chapter shall be passed (a) in a case where the relevant assessment or other order is the subject-matter of an appeal to the Deputy Commissioner (Appeals), or the Commissioner (Appeals) under section 246 or an appeal to the Appellate Tribunal under sub-section (2) of section 253, after the expiration of period of (i) two years from the end of the financial year in which the proceedings, in the course of which action for imposition of penalty has been initiated, are completed, or (ii) six months from the end of the month in which the order of the Deputy Commissioner (Appeals) or the Commissioner (Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st time by the Income-tax Officer but also to proceedings taken subsequently pursuant to an order of remand passed by the appellate authority remanding the matter to the lower authorities and this period of limitation could not be extended merely for the reason that the superior Tribunal has set aside the first order made by the Income-tax Officer and directed him to make the order afresh. The order imposing penalty should be passed within the prescribed time-limit from the date of the first order passed by the first authority. In reply to the arguments of learned counsel for the assessee, learned counsel for the Revenue submitted that section 275 of the Act sets out the prescribed period of limitation for passing an order of penalty and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at where the assessment order had been set aside in appeal and proceedings had been remanded for fresh disposal, it was the date of the fresh assessment order and not the date of the original assessment order which was relevant for the purpose of limitation for initiation of proceedings imposing penalty. Reliance was placed by learned counsel on a decision of the Andhra Pradesh High Court in Seetharama Lakshmi Rice and Groundnut Oil Mill Contractors Co. v. ITO [1978] 111 ITR 212. By looking at the provisions of section 275, it would be seen that wherever there has been an appeal against the assessment order or other order and if the matter reaches a finality, the period as fixed by sub-clause (ii) of clause (a) is six months from the end ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment proceedings or other order". The proceedings in the instant case were initiated with the fresh order of assessment. The decision in Seetharama Lakshmi's case [1978] 111 ITR 212 (AP), squarely applies to the facts of the present case where the provisions of section 275 have been correctly analysed by holding that it is the fresh assessment made by the Income-tax Officer after remand which should be taken as the relevant assessment and not the first assessment prior to remand. The subsequent judgment of the Andhra Pradesh High Court in Ganapathi Rao's case [1978] 115 ITR 277 has not taken note of the decision in Seetharama Lakshmi's case [1978] 111 ITR 212 (AP). We are, therefore, in full agreement with the law laid down by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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