9911796707
TMI Blog1984 (4) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the amount of penalty to 25% of the tax sought to be avoided ? " The assessment years involved are A.Ys. 1950-51, 1958-59, 1962-63 and 1963-64. For the first year, the assessee was the firm, Banwari Lal Dwarka Prasad, and for the other three years, the firm, Chandu Lal Dwarka Prasad. The assessments of the assessees for the four assessment years in question were completed in due course and the incomes were assessed as follows : Assessment year Rs. 1950-51 1,68,351 1958-59 69,156 1962-63 1,04,546 1963-64 97,870 It so transpired that in a raid organised at the premises of the assessees on October 22, 1964, certain documents and other materials were seized which showed that the assessees had effected several transactio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, as below : Assessment year Amount 1950-51 52,000 1958-59 52,000 1962-63 43,000 1963-64 43,000 1964-65 43,000 Total 2,33,000 In this writing, the assessee also agreed to the levy of penalty at the rate of 25% on the amount of tax sought to be avoided in each of the four assessment years in question. It appears that the Commissioner did not accept the offer of the assessees for settlement. The ITO framed the assessments and initiated penalty -action under s. 271(1)(c) against the assessees.. The IAC, to whom penalty action was referred, came to the conclusion that these were clear cases in which the two assessees had concealed their income in the four assessment years in question respectively and had furnished in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pleted on January 10, 1969, on an income of Rs. 8,481. Subsequently, this assessment was reopened and the assessee in pursuance to the notices under s. 148 of the I.T. Act, 1961, filed his return on July 7, 1970, showing an income of Rs. 4,481 as before. The assessment was completed on a total income of Rs. 14,481, which included further addition of a sum of Rs. 6,000. The IAC levied a penalty of Rs. 6,000 under s. 271(1)(c) of the I.T. Act, 1961. On appeal by the assessee, the Tribunal directed that penalty be reduced to 20% of the tax sought to be avoided. The Division Bench, consisting of S. Ranganathan and Leila Seth JJ., after a detailed discussion, held that, in such a case, the penalty provision as on the date of the first return fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment proceedings. On a direct reference to the Supreme Court, it was held that the jurisdiction to make the second order was not lost because the ITO had omitted to recall the earlier order, although the two orders could not be enforced simultaneously or stand together. It was further observed that as, however, the first order had been cancelled, there was only one order and the second order was, therefore, a legal order. We find ourselves in respectful agreement with the aforesaid decision of the earlier Bench of this court and follow the same. We, accordingly, answer the question referred in the affirmative, i.e., in favour of the assessees and against the Revenue. Under the circumstances of the case, the parties are left to bear th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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