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TMI Blog1989 (7) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... ailure of the Income-tax Officer to initiate penalty proceedings under section 273 (a) of the Income-tax Act ? " The facts, shortly stated, are that the Income-tax Officer did not initiate any penalty proceedings under section 273(a) of the Income-tax Act while making the assessment in question. The Commissioner of Income-tax was of the opinion that the notice under section 210 of the Income-tax Act had been served upon the assessee calling for payment of advance tax of ₹ 96,372. The assessee filed an estimate under section 212 on September 11, 1975, showing an estimated income of ₹ 50,000 whereupon the tax payable came to ₹ 36,750. The tax was paid as under : Rs. 14-06-1975 32,124 15-09-1975 2,313 19-12-1975 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r was entitled to exercise his jurisdiction under section 263 of the Income-tax Act in such circumstances. On behalf of the assessee reliance was placed on a recent judgment of the Delhi High Court in Addl. CIT v. J. K. D'Costa [1982] 133 ITR 7 in which it was observed that proceedings for levy of penalty whether under section 271 (1) (a) or section 273(b) are proceedings independent of and separate from the assessment proceedings. There is no identity between the two. Though it is usual for the Income-tax Officer to record in the assessment proceedings that penalty proceedings are initiated, it is more a matter of convenience than that of a legal requirement. All that the law requires is that the penalty proceedings should be initiated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is not possible when the Commissioner is dealing with the assessment proceedings and the assessment order to expand the scope of these proceedings and to view the penalty proceedings also as part of the proceedings which are being sought to be revised by the Commissioner. There is no identity between the assessment proceedings and the penalty proceedings ; the latter are separate proceedings, that may, in some cases, follow as consequence of the assessment proceedings. As the Tribunal has pointed out, though it is usual for the Income-tax Officer to record in the assessment order that penalty proceedings are being initiated, this is more a matter of convenience than of legal requirement. All that the law requires, so far as the penalty pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Surendra Prasad Singh v. CIT [1988] 173 ITR 510, following the decision of the Delhi High Court in J. K. D'Costa [1982] 133 ITR 7, also took the same view. It may be mentioned that on March 2, 1984, the special leave petition filed by the Department against the judgment of the Delhi High Court in J. K. D'Costa [1982] 133 ITR 7 was rejected. Penalty proceedings do not form part of assessment proceedings. Recording by the Income-tax Officer of satisfaction or direction to issue notice under section 273 of the Income-tax Act, 1961, for default committed under section 273(a) for failure to file an estimate of advance tax and pay the tax is not an integral part of the assessment order so that failure to do so would render it ipso fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eve to be untrue. The Commissioner of Income-tax held that the Income-tax Officer should have taken action under section 273(a) because the assessee failed to file a revised estimate under section 212(2) and pay tax accordingly. The Commissioner of Income-tax also held that the assessee did not file any explanation for failure to file a proper revised estimate as envisaged under section 212(2). Nor did the assessee file any explanation to the satisfaction of the Income-tax Officer that the assessee had reasonable cause which prevented it from filing the revised estimate and thus warranting waiver of penalty under section 273(a). It was for the Income-tax Officer to find out whether there was any reasonable cause preventing the assessee fro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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