1981 (3) TMI 128 - AT - Income Tax

ITAT Jaipur Dismisses Revenue's Appeal for AY 1972-73 on Re-assessment & Penalty Proceedings

The appeal by the Revenue for the asst. yr. 1972-73 against the order of the AAC was dismissed by ITAT Jaipur. Re-assessment under s. 147, r/w s. 148 is ... Regular assessment under s. 143/144 - re-assessment under s. 147 r/w s. 148 - penalty for furnishing untrue estimate under s. 273(a) r/w s. 274 - satisfaction reached in the course of proceedings in connection with the regular assessment - definition of 'regular assessment' in s. 2(40)Regular assessment under s. 143/144 - re-assessment under s. 147 r/w s. 148 - penalty for furnishing untrue estimate under s. 273(a) r/w s. 274 - satisfaction reached in the course of proceedings in connection with the regular assessment - Validity of imposing penalty under s. 273(a) r/w s. 274 when penalty proceedings are initiated during re-assessment under s. 147 r/w s. 148 instead of during a regular assessment under s. 143/144. - HELD THAT: - The Tribunal held that the expression 'regular assessment' is defined by s. 2(40) to mean assessments under s. 143 or s. 144, and a re-assessment under s. 147 r/w s. 148 is not a 'regular assessment.' Section 273 can be invoked only when the ITO, in the course of proceedings in connection with a regular assessment, is satisfied that an assessee committed the default described in clause (a). Since the ITO initiated penalty proceedings in the course of re-assessment proceedings, he could not be said to have formed the requisite satisfaction in connection with a regular assessment. The Tribunal relied on the semantic distinction and the reasoning in the Allahabad High Court decision in CIT v. Smt. Jagjit Kaur to hold that penalty under s. 273(a) could not be validly levied where proceedings pertain to re-assessment rather than to a regular assessment. [Paras 2, 3]Penalty proceedings under s. 273(a) r/w s. 274 initiated during re-assessment under s. 147 r/w s. 148 are not sustainable because re-assessment is not a 'regular assessment' within the meaning of s. 2(40), and the required satisfaction in connection with a regular assessment was not obtained.Final Conclusion: The Revenue appeal is dismissed; penalty under s. 273(a) r/w s. 274 could not be levied because the penal action was initiated in the course of re-assessment proceedings rather than in proceedings in connection with a regular assessment. The appeal by the Revenue for the asst. yr. 1972-73 against the order of the AAC was dismissed by the ITAT Jaipur. Re-assessment under s. 147, r/w s. 148 is not a regular assessment under s. 143 or s. 144. Penalty proceedings under s. 273 cannot be imposed in re-assessment proceedings. The appeal was dismissed as no penalty can be levied in such circumstances.