TaxTMI 
TaxTMI 
2012 (1) TMI 39
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....ith penalty proceedings under Section 271(1)(c) of the Income Tax Act 1961 (hereinafter referred to as 'the said Act'). 2. The assessee is an association of the persons comprising of five members namely Laxmi Traders, Bijay Paper Trading Co., Pradeep Agencies, Biswanath Industries Limited and Bishwanath Traders & Investment Limited. As indicated in the impugned order the said association of persons was constituted for carrying on the business of procuring orders on behalf of M/s Reliance Industries Limited (RIL) for supply of Purified Terephthalic Acid to M/s Indo Rama Synthetics India Limited. In respect of the assessment years in question, the assessee i.e., the association of persons (A.O.P) had filed a return of income at nil an....
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.... case. It was submitted that the said sections would come into play when the income was first assessed in the hands of the A.O.P. and not in those cases where the assessment was first done in the hands of the individual persons. It was also contended that inasmuch as the members of the A.O.P. were assessed prior to the assessment in the hands of the A.O.P. the said provision would not be applicable and that in terms of the circular the A.O.P. could not be taxed for the very same income which had been disclosed by the members in their individual returns. The Commissioner of Income Tax (Appeals) did not agree with the submissions made by the assessee. 5. In respect of assessment year 2003-04, the assessee had filed an appeal being ITA 17/Del....
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....ed 24th August 1966 or is valid in the light of the judgment of the Supreme Court in Achtaiah's case (218 ITR 239)?" The Special Bench ultimately decided the appeal on 31.08.2007 in favour of the revenue and against the assessee. The Assessee had filed an appeal before this court under section 260A of the said Act, however, that was also dismissed by this court by an order dated 06.10.2009. Insofar as the quantum proceedings are concerned, the matter rests there. 6. The present proceedings, as already pointed out above, arise out of the penalty proceedings initiated under Section 271(1)(c) of the said Act. The point urged by the learned counsel for the revenue is that when the assessee had filed the return in respect of the ....
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....ral order was passed on 04.04.2007 which is much after the date on which the return was filed and on that date there was no doubt at all with regard to the position in law. 9. Having considered the arguments advanced by the counsel for the parties, we are of the view that the submissions made by the learned counsel for the assessee cannot be brushed aside that there were two views possible inasmuch as the Tribunal itself was in doubt as to which of the two views were to be preferred. And it is for this very reason that the Tribunal had passed the referral order dated 04.04.2007 requiring the matter to be considered by a Special Bench. The fact that the referral order came into being much after the returns were filed would be of no h....