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Judgment
Desai, J.—The question referred to us by the Tribunal reads as under :
"Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee should not have been penalised u/s 273(b) of the Income Tax Act, 1961, when the failure was u/s 18A(3) of the Indian Income Tax Act, 1922 ?"
A penalty of Rs. 5,000 (Rupees five thousand) was levied on the assessee. We need not, for reasons which are obvious, refer to the circumstances under which the penalty came to be levied. When the matter was carried by the assessee before the AAC, the AAC relying on the decision of this court in the case of MISS SAROJ NAYUDU Vs. APPELLATE ASSISTANT COMMISSIONER OF Income Tax, NAGPUR and ANOTHER., , allowed the appeal. In further appeal to the Tribunal by the Revenue, the decision of the AAC was maintained. Neither the AAC nor the Tribunal seems to have considered the question whether the levy of penalty was justified, or whether, if held justified, the quantum should be as determined by the ITO.
In Jain Bros. and Others Vs. The Union of India (UOI) and Others, , the view taken by this court in the case of MISS SAROJ NAYUDU Vs. APPELLATE ASSISTANT COMMISSIONER OF Income Tax, NAGPUR and ANOTHER., has been overruled. It has been held that the assessee would be liable to penalty provided by s. 271(1) of the I.T. Act, 1961, for the default mentioned in s. 28(1) of the Indian I.T. Act, 1922. If that be so, the question referred to us is required to be answered in the negative and in favour of the Revenue. It is, however, made clear that when the matter goes back to the Tribunal, the Tribunal will have to consider if called upon to do so by the assessee, the questions which were not touched either by the AAC or the Tribunal as earlier mentioned. Parties to bear their own costs of the reference.