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TMI Blog1987 (3) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 256(1) of the Income-tax Act, 1961, made at the instance of the Revenue. It raises the following question : " (1) Whether, on the facts and in the circumstances of the case and having regard to the provisions of section 271(2) of the Income-tax Act, 1961, any penalty was leviable against the assessee, firm under section 271(1)(a) of the said Act ? " We are concerned with the assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lea of the assessee that no penalty was exigible under section 271(2) of the said Act. Mr. Jetly, learned counsel for the Revenue, relied upon the judgments of this court in CIT v. Janata Trading Co. [1984] 150 ITR 676 and CIT v. N. G. K. Electrical Industries [1987] 163 ITR 513, in support of the submission that such penalty was exigible. In the former judgment, the questions posed read thus: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act for that purpose did not arise and in cancelling the penalty of Rs. 12,935 imposed on the assessee-firm as per the order of the Appellate Assistant Commissioner ? " Relying, principally, upon the judgment of the Calcutta High Court in CIT v. Priya Gopal Bishoyee [1981] 127 ITR 778, the questions were answered in the negative and in favour of the Revenue. In the latter judgment, the question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) makes a special provision regarding registered firms. As we see it, sub-section (2) is applicable to a firm found to be liable to penalty under sub-section (1) because it satisfies the requirements of one or the other of clauses (a) to (c) of sub-section (1). Penalty, if imposed on that firm, must then be calculated on the basis that it is an unregistered firm. It does not appear to us to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lace, we are, with great respect, unable to agree with the view expressed by the Gauhati High Court, particularly the view that the non obstante clause in section 271(2) does not override the provisions of section 271(1)(i) of the Income-tax Act, 1961. The paragraph extracted above from this court's judgment in the case of N.G.K. Electrical Industries [1987] 163 ITR 513, sets out, in our view, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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