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TMI Blog1980 (3) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... imposing penalty should not be made under s. 271 of the I.T. Act. On the self-same allegations the other notice intimated the petitioner that the case for a levy of penalty under s 271(1)(c) was being referred to the IAC and that further proceeding in regard to the levy of penalty would take place before the IAC as provided for in s. 274(2) of the I.T. Act. The second set of notices (annex. " D ") directed the petitioner to appear before the ITO and to show cause why an order imposing a penalty should not be made under s. 273 of the I.T. Act, 1961, for its failure, without reasonable cause, to furnish an estimate of advance tax payable in accordance with the provisions of s. 212(3) in respect of the two assessment years. By the last set of notice (annex. " E "), the petitioner was informed of the initiation of proceedings under s. 274 read with s. 271 of the I.T. Act for its failure to furnish the returns of income within the time allowed and in the manner required by s. 139(1) of the Act, without reasonable cause, for the above two assessment years. In assailing the first set of notices (annex. " C "), Mr. Haldar contended that for concealment of income or for furnishing inaccu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng income exceeds Rs. 25,000 it is incumbent upon him to refer the matter to the IAC who has to continue with the proceeding for levying penalty after giving an opportunity to the assessee to show cause against such imposition. That being the position, the ITO was not justified in calling upon the petitioner to appear before him and to show cause why an order imposing a penalty should not be made under s. 271 of the Act when he was referring the matter to the IAC under s. 274 and intimated the assessee that further proceeding would take place before the latter. The two identical notices issued by the ITO, being No. 11-000-CX-7837/Cal/CC(24)/69-70/1065 dated 29th November, 1975, and No. 11-000-CX-7837/Cal/CC(24)/73-74/1060, dated 29th November, 1975, which form part of annex. " C ", must, therefore, be held to be without jurisdiction and the ITO, the respondent No. 1 in the instant rule, is hereby commanded to forbear from giving effect or taking any steps in pursuance of the said two notices. Inasmuch as I find that the proceedings for penalty were initiated by the ITO on a proper satisfaction recorded under s. 271(1)(c) of the Act, I am unable to accept the contention of Mr. Halda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ussed the relevant provisions of the Act in the light of various decisions, including one of the Privy Council and ultimately held (p. 187) : " Having regard to the above discussion, it is clear that the expression 'regular assessment' occurring in section 18A(9) would cover cases of reassessment undertaken under section 34(1) of the Act." Having given my anxious consideration to the relevant provisions of the Act I am unable to share the views expressed by the Patna High Court and it appears to me that the decision in the case of Deviprasad Kejriwal [1976] 102 ITR 180 (Bom) lays down the correct proposition, though the same is under the Indian I.T. Act, 1922, which did not define " regular assessment." Chapter XIV of the Act prescribes the procedure for assessment of income. Section 139(1) casts an obligation upon every person who has total income exceeding the maximum amount which is not taxable, to furnish a return of his income or the income of any other person in respect of which he is assessable under the Act. Section 139(2) empowers the ITO to issue a notice to any person to furnish a return of his income if he is of the opinion that he is assessable under the Act. Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en to the same. The contention of Mr. Haldar challenging the above notice (annex. " D ") must, therefore, fail. In respect of the third set of notices (annex. " E "), Mr. Haldar contended that having regard to the fact that a notice under s. 148 was issued, the ITO could initiate a penalty proceeding under s. 271(1) of the Act, for non-compliance with the said notice but not for non-submission of return under s. 139(1) of the Act. In support of his contention Mr. Haldar relied upon a decision of the Patna High Court in the case of Addl. CIT v. Bihar Textiles [1975] 100 ITR 253, wherein it was held that once a notice under sub-s. (2) of s. 139 of the Act was validly issued, it precluded the penal provision being attracted so far as the failure to furnish the return under s. 139(1) was concerned and only penalty for non-compliance with notice under s. 139(2) could be imposed. Undoubtedly the above decision supports the contention of Mr. Haldar, but then a Division Bench of our High Court in the case of G. S. Atwal and Co. v. CIT [1979] 117 ITR 171 dissented from the said decision with these words (p. 173): " We are unable to agree with the view of the Patna High Court. Our view i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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