1979 (11) TMI 46

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....NGH C.J.-This is a reference made by the Income-tax Appellate Tribunal at the instance of the assessee referring for our answer the following question of law : " Whether, on the facts and in the circumstances of the case, for the purpose of determining the amount of penalty under s. 271(2), the tax payable by the firm in relation to which the penalty is calculated should be reduced by the amoun....

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....he excess income that was brought under tax by the order of reassessment was Rs. 86,086. Penalty proceeding were taken against the assessee under s. 271(1)(a) of the Act for default in filing the return under s. 148. The amount of penalty has been fixed at the rate of 2 per cent. of the tax which would be payable on the total income of Rs. 3,03,967 for each month of default. For purposes of imp....

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.... earlier assessment. The computation of tax then has to be done under s. 152. The computation of tax under this section is not limited to the income which was not included in the original assessment. When the escaped income is assessed under s. 147, it has to be added to the income, if any, which was earlier assessed for finding out the tax which the assessee is liable to pay for the particular as....

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....ing the income that had escaped assessment. This is also clear from the Explanation which says that assessed tax means the tax as reduced by the sum, if any, deducted at source under Chap. XVII-B or paid in advance under Chap. XVII-C. If the intention of the law-makers was that assessed tax should mean the difference between the tax assessed at the stage of reassessment and the tax originally asse....