9911796707
TMI Blog1987 (7) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... The Income-tax Officer completed the assessments and did not initiate any action against the assessees under section 273 of the Act. Later on, on completion of the assessment of the firm, the Income-tax Officer proceeded to rectify the assessments under section 155 of the Act and at that stage, proceedings under section 273(b) of the Act were initiated against the assessees. It was contended on behalf of the assessees that as the penalty proceedings were not initiated against them in the course of the regular assessments, the proceedings commenced by the Income-tax Officer were not valid. The Income-tax Officer overruled that objection and levied penalties under section 273(b) of the Act. Aggrieved by those orders, the assessees preferred appeals. The Appellate Assistant Commissioner upheld the contentions urged on behalf of the assessees and held that since the penalty proceedings had not been initiated during the course of the regular assessment-proceedings under section 143 or section 144 of the Act, penalty proceedings initiated by the Income-tax Officer while revising the assessments under section 155 of the Act were illegal. The orders imposing penalty passed by the Income-ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of levying penalty under section 273 of the Act (See Gates Foam Rubber Company v. CIT [1973] 90 ITR 422 (Ker), CIT v. Ram Chandra Singh [1976] 104 ITR 77 (Pat), Smt. Kamla Vati v. CIT [1978] 111 ITR 248 (P H), CIT v. Ganeshram Nayak [1981] 129 ITR 43 (Orissa), D. Swarup, ITO v. Gammon India Limited [1983] 141 ITR 841 (Bom), CIT v. Pratap Singh of Nabha[1982] 138 ITR 27 (Delhi) and ClT v. Smt. Jagjit Kaur [1980] 126 ITR 540 (All)). It appears to be the view of the majority of the High Courts that an assessment under section 147 of the Act cannot be regarded as part of assessment proceedings under section 143 or 144 of the Act. Section 148 of the Act refers to assessment under section 147. Therefore, assessment under section 147 cannot mean the same thing as assessment under section 143 or section 144 of the Act. That is why an amendment was made in section 215 of the Act by the Taxation Laws (Amendment) Act, 1984, whereby sub-section (6) was inserted in section 215 providing that when in relation to an assessment year an assessment is made for the first time under section 147, the assessment so made shall be regarded as a regular assessment for the purpose of sections 215, 216 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een passed under section 143 of the Act, then the order under section 155 would be part of the proceedings for assessment under section 143 of the Act. However, if the order of assessment, which has been amended, has been passed under section 144 or section 147 of the Act, then the order of amendment (of assessment) under section 155 of the Act would be part of the proceedings for assessment under section 144 or section 147, as the case may be. When an order is passed under section 155, to ascertain as to whether it is part of the proceedings for assessment under section 143, section 144 or section 147 of the Act, one has to turn to the order of assessment which has been amended. If it has been passed under section 143, as has been done in the instant case, then the action taken under section 154 or section 155 would be part of the proceedings for assessment under section 143 of the Act. It was, however, contended on behalf of the assessee that the order under section 155 was passed by the Income-tax Officer after the expiry of the period of limitation provided by section 153 for making an assessment under section 143 and hence, in the instant case, the order under section 155 co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder regular assessment, then on the excess so paid, the asseseee would be entitled to interest. Similarly, where the payment of advance tax by the assessee was less than seventy-five per cent. of the assessed tax, then he has to pay interest to the Government at the rate of twelve per cent. per annum. The scheme is to see that neither the State nor the assessee loses the interest on the amount which is either overpaid or underpaid. In cases of over-payment, the State pays interest, while in cases of under-payment of advance tax, the assessee pays interest. The scales are thus held even ...... Learned counsel for the Commissioner contended that when once interest had been granted in the regular assessment, the assessee would be eligible for no further interest as a result of modification of the assessment either by rectification or otherwise. We are unable to accept this submission. We have already seen that there is a specific provision made under section 215(3)of the Act in order to cover cases of interest payable by the assessee where the payment of tax was less than seventy-five per cent. as a result of the rectification or other orders passed in this case. Though such an exp ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
