Commissioner of Income Tax, Bombay City-III vs Jameal and Co.

Madon, J.—The question which has been submitted to this court for its determination in this reference under s. 256(1) of the I.T. Act, 1961, which has been made by the Income Tax Appellate Tribunal at the instance of the Commission of Income Tax is :

"Whether, on the facts and in the circumstances of the case, for the assessment years 1950-51 to 1955-56, penalty could be valid levied on the assessee u/s 271(1)(a) of the Income Tax Act, 1961 ?"

Relying upon the judgment of the Mysore High Court in S.C. Magavi, Haveri Vs. Commissioner of Income Tax, Mysore, , the Tribunal held that in respect of the assessment years in question, namely assessment years 1950-=51 to 1955-56, penalty could be validly levied upon the assessee only under the provision so the Indian I.T. Act, 1922, and not under the provisions of s. 271(1)(1) of the I.T. Act, 1961. After the order of the Tribunal an appeal was filed by the department in the Supreme Court Against the said judgment of the Mysore High Court, and it was allowed by the Supreme Court. The judgment of the Supreme Court is Commissioner of Income Tax, Mysore Vs. S.G. Magavi, . In that case, in view of an earlier decision of the Supreme Court, namely, Jain Bros. and Others Vs. The Union of India (UOI) and Others, , the respondents canceled that where the assessments has been completed after April 1, 1962, which is also the case here, penalty can be imposed under s. 271 of the I.T. Act, 1961, in respect of the assessment years ending prior to the commencement of the 1961 Act. The Supreme Court gave its judgment accordingly, and reversed the judgment of the Mysore High Court.

In view of the above position, both the learned counsel are agreed that the questions submitted to this court for its onion in this reference must be answered in favour of the department and against the assessee.

Accordingly, we answer the question in the affirmative.

Certain other contentions were raised by the assessee at the hearing of the appeal before the Tribunal. Some of those contentions were negatived by the Tribunal. With respect to some others, when the respondents in their application for a reference wanted a question referred to this respondents in their application for a reference wanted a question referred to this High Court based upon them, the Tribunal held that that point was not considered by it because at no stage such a point has been taken by the assessee. Some other points canvassed by the assessee were not decided by the Tribunal. When the Tribunal comes to dispose of the matter finally in the light of the judgment given in this reference, the Tribunal will consider such of the question as it has left unconsidered and have actually arisen for consideration in the appeal filed by the assessee before it.

There will be no order as to the costs of this reference.