https://www.taxtmi.com/caselaws?id=8215 The court clarified that the proceedings for the levy of penalty under Section 221(1) of the Income-tax Act are distinct from recovery proceedings, and the notice for penalty is not barred by the limitation period for recovery of advance tax under Section 231. However, if the right to recover advance tax lapses, the ancillary right to levy a penalty also lapses. The court emphasized the differences between penalty and recovery proceedings and highlighted that penalties may be proposed before tax quantification. In cases of final assessment resulting in a loss, the penalty under Section 221(2) is not leviable, and any penalty paid shall be refunded if the tax amount is wholly reduced. The court dismissed the writ petitions, stating that the petitioner had the opportunity to challenge the penalty before the Income-tax Officer. en-us Mon, 26 Apr 1971 00:00:00 +0530 Mon, 06 Apr 2009 09:10:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=8215 The court clarified that the proceedings for the levy of penalty under Section 221(1) of the Income-tax Act are distinct from recovery proceedings, and the notice for penalty is not barred by the limitation period for recovery of advance tax under Section 231. However, if the right to recover advance tax lapses, the ancillary right to levy a penalty also lapses. The court emphasized the differences between penalty and recovery proceedings and highlighted that penalties may be proposed before tax quantification. In cases of final assessment resulting in a loss, the penalty under Section 221(2) is not leviable, and any penalty paid shall be refunded if the tax amount is wholly reduced. The court dismissed the writ petitions, stating that the petitioner had the opportunity to challenge the penalty before the Income-tax Officer. Case-Laws Income Tax Mon, 26 Apr 1971 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=8215