Andhra Pradesh H.C : Whether, on the facts and in the circumstances of the case, the Tribunal was justified in upholding the penalty imposed under s. 273(b) of the IT Act, 1961, of Rs. 1,520 for the asst. yr. 1976- 77 ?

Counsel Appeared

Abdul Razak, for the Assessee : M. Suryanarayana Murthy, for the Revenue

Y.V. ANJANEYULU, J.:

This is a reference at the instance of the assessee under s. 256(1) of the IT Act, 1961 (the ” Act.” for short). The Tribunal referred the following question for consideration of this Court in connection with the income-tax asst. yr. 1976-77 :

” Whether, on the facts and in the circumstances of the case, the Tribunal was justified in upholding the penalty imposed under s. 273(b) of the IT Act, 1961, of Rs. 1,520 for the asst. yr. 1976- 77 ? “

It is not in dispute that for the asst. yr. 1976-77, the assessee did not file an estimate of advance tax payable. Consequently, the assessee was called upon to show cause why penalty should not be levied. No reply to the show-cause notice was furnished to the ITO. Consequently, penalty of Rs. 1,520 was levied under s. 273(b) of the Act. The assessee appealed against the levy of penalty to the CIT (Appeals) unsuccessfully. A second appeal to the Tribunal met the same fate. The assessee then sought the present reference under s. 256(1) of the Act.

The short contention urged before us by learned counsel for the assessee is that at the relevant time when the penalty was levied on March 20, 1979, there was no provision like s. 273(b) of the Act. It is pointed out that there were certain amendments which became effective from June 1, 1978. Pursuant to those amendments, s. 212(3) of the Act which was in existence till June 1, 1978, had been renumbered as s. 209A(1). Similarly, s. 273(b) of the Act which was in force prior to June 1, 1978, was numbered as s. 273(1)(b) of the Act. Having looked into the provisions, prior to the amendment and after the amendment, we find that they are practically the same except that there was a re-grouping of the sections which took effect from June 1, 1978. Basically, there is no difference in the obligation of the assessee to furnish an estimate of advance tax payable and the ingredients necessary for the levy of penalty for failure to furnish an estimate of advance tax. The contention that at the time when the order under s. 273(b) was passed, the section was numbered as s. 273(1)(b) and that s. 212(3) was renumbered as s. 209A(1) does not, in our opinion, affect the power of the ITO to levy penalty. That apart, we find that the assessment year involved is 1976-77. The law that is applicable for the asst. yr. 1976-77 is the one that was in force at the beginning of the assessment year, viz., on April 1, 1976. In such circumstances, the ITO was justified in applying the provisions of law as were in force for the asst. yr. 1976-77 without taking note of the amendments which came into effect from June 1, 1978. Even though the order of penalty was passed on March 20, 1979, the ITO had to apply the provision of law as was in force on the first day of the asst. yr. 1976-77 or alternatively the provision of law in force when the default was committed. In that view also, the order of the ITO levying penalty is not liable to be questioned.

4. We hold that the Tribunal was justified in sustaining the penalty imposed under s. 273(b) of the Act. The question referred to us is accordingly answered in the affirmative, that is to say, in favour of the Revenue and against the assessee.

No costs.

[Citation : 170 ITR 479]