9911796707
TMI Blog1991 (4) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... the ITO on income of Rs. 10,84,000 and after giving effect to the order of the CIT(A) the assessed income came to Rs. 8,92,030 and as 75 per cent of tax payable on assessed income exceeded Rs. 77,000 which was the advance tax paid by the assessee, the ITO initiated proceedings for imposition of penalty, under s.273(1)(a) of the Act on the allegation that assessee had furnished estimate which he knew or had reason to believe to be untrue. 3. The explanation of the assessee before the ITO was that difference in assessed income and returned income was due to certain disallowances and addition and that provisions of s. 273(1)(a) were not attracted. This explanation was rejected by the ITO who imposed penalty of Rs. 8,800 under s.273(1)(a) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that assessee was entitled to carry forward deficiency of Rs. 9,40,210. Consequently, according to the learned counsel for the assessee, it could not be said that the estimate was untrue to the knowledge of the assessee. Attention was drawn to the fact that constitutional validity of retrospective amendment in s. 80J had been challenged by certain assessees before the Supreme Court. The learned counsel referred to orders of the Tribunal dt. 15th Nov., 1980. 26th Nov., 1981 and 21st July, 1983 for the asst. yrs. 1973-74, 1976-77 and 1977-78 by which the Tribunal has restored the computation of relief under s.80J to CIT(A) with direction to follow the decision of the Supreme Court. It was submitted that the fact that ultimately Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he facts and circumstances appearing in each case. In the present case, the only question to be decided is whether the assessee could have entertained reasonable belief on the date of estimate to the effect that the relief under s.80J for all the previous years would be computed on the basis that r. 19A(3) was ultra vires and retrospective amendments in s.80J were unconstitutional and deficiency would be adjusted on that basis. If he could not have entertained such reasonable belief, he could not have set off Rs. 9 lakhs and odd from estimated income of Rs. 9 lakhs. We find that as far as asst. yr. 1972-73 was concerned, the computation made by the assessee was rejected by the ITO and the order of the ITO was upheld by the CIT(A). As far as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the Tribunal also noted in the order against the above mentioned order under s.263 that deficiency in the assessment order for asst. yr. 1979-80 was not allowable. For asst. yr. 1980-81 the Tribunal upheld the computation of the ITO as by that time the decision in Lohia Machines had been published. From the above facts, it is clear that as far as the date on which the estimate was to be filed was concerned, there were orders of Tribunal dt. 15th Nov.,1980 and 26th Nov., 1981 restoring the matter to CIT(A) for computing relief under s.80J for those two years in accordance with the Supreme Court decisions. As far as deficiency for other years were concerned, the computation had been finally made in conformity with the retrospective amend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... belief, the estimate filed by the assessee must be regarded as untrue to the assessee's knowledge. It is true that constitutional validity has been challenged by some of the assessee before the Supreme Court. However, the Supreme Court had not stayed the operation of provisions in the Act. The Supreme Court had granted stay of demand in respect of those assessees who were parties before the Supreme Court. Consequently, mere fact that constitutional validity of retrospective amendment was challenged before the Supreme Court by some parties would not have given rise to reasonable belief in the mind of the assessee that while estimating the income he could ignore the retrospective amendments and calculate deficiencies of the earlier years on t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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