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Judgment
The assessment years in question are 1985-86, 1986-87 and 1987-88, It is not in dispute that the assessments had in fact been completed u/s 143(3) of the Income Tax Act, 1961. Subsequently, re-assessment proceedings were completed u/s 147. The revenue sought to impose penalty u/s 273(2)(aa) on the assessee in respect of the order passed u/s 147.
The contention of the assessee was that in view of the decision of this court in Modi Industries Limited, Modinagar and Others Vs Commissioner of Income Tax, Delhi and Another , the penalty proceedings u/s 273 would not lie in respect of an assessment u/s 147 and that the phrase regular assessment used in section 273 referred to the original assessment made u/s 143(3).
The Tribunal upheld the submission of the assessee. A reference was made u/s 256(2) before the High Court on the following question :
"Whether on the facts and circumstances of the case, the Tribunal was right in law in holding that penalty u/s 273(2)(ad) cannot be levied as it has been initiated in the re-assessment proceedings ?"
The High Court rejected the reference application on the ground that the issue was squarely covered by the decision in Modi Industries Ltd.s case (supra).
The learned counsel for the appellant has submitted before us that the decision in Modi Industries Ltd.s case (supra) did not consider the question whether the first assessment in respect of escaped income u/s 147 was the regular assessment for the purposes of section 273. He has relied upon the provisions of section 215(6) in support of his submission that for the purpose of section 273, a regular assessment in respect of reassessment must be the order that is passed for the first time u/s 147 in respect of the escaped income.
Learned counsel appearing on behalf of the assessee has submitted that the decision in Modi Industries Ltd.s case (supra) must be taken to have concluded this issue as well and has pointed out several observations in the judgment of this court which, according to him, supports this stand. It is further submitted that in any event the assessees case was not covered by the provisions u/s 215(6).
We are of the view as the aforesaid submission on behalf of the parties would show that there is a question of law which required consideration. It cannot be said on a bare perusal of the decision in Modi Industries Ltd.s case (supra) that it has concluded the issue relating to assessments u/s 147 in favour of the assessee and against the revenue, as appears to have been assumed by the High Court. We, therefore, set aside the judgment of the High Court and direct the Tribunal to draw up the statement of case and refer the question set out above, to the High Court for its opinion. It is made clear that this court has not expressed any view on the rival contentions of the parties.
The Appeals are disposed of.