Assessed tax in reassessment means tax on total income finally assessed, not just incremental escaped income.

For penalty under section 271(1)(a) read with section 271(2), the expression "assessed tax" in a reassessment under section 147 means the tax on the total income finally assessed for the year, not merely the incremental tax on the escaped income. The computation is made on the aggregate assessed income, subject only to statutory reductions for tax deducted at source or paid in advance. In a reassessment, the tax liability is therefore not confined to the difference between the original assessment and the reassessed income. The penalty scheme also treats a registered firm as an unregistered firm for this purpose.

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Issues: Whether, for computing penalty under section 271(1)(a) read with section 271(2), the expression "assessed tax" in a reassessment case under section 147 means the tax on the income assessed in reassessment alone or the tax on the total income including income already assessed in the original assessment.

Analysis: The penalty scheme treats a registered firm as an unregistered firm for the purpose of section 271(1)(a). In a reassessment following an earlier assessment, section 147 brings to tax the income that had escaped assessment, but the computation of tax liability is governed by the total income for the assessment year. The assessed tax is therefore the tax computed on the aggregate income, reduced only by tax deducted at source or paid in advance as contemplated by the Explanation. The phrase does not mean the difference between the tax on reassessed income and the tax on the original assessment.

Conclusion: The expression "assessed tax" under section 271(1)(a) means the tax assessed on the total income for the year, including the escaped income brought in by reassessment, and not merely the incremental tax attributable to the reassessment.

Ratio Decidendi: For penalty under section 271(1)(a), assessed tax in a reassessment case is the tax on the total income finally assessed for the year, subject only to statutory reductions for tax deducted at source or paid in advance.

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