Law:

Section:

Section 147, read with sections 148, 139 and 217, of the Income-tax Act, 1961 - Assessment years 1961-62 to 1966-67 - Income escaping assessment - General - Assessee filed writ petition seeking quashing of reassessment proceedings in which interest was levied on him under sections 139(3) and 217 for failure to file return of income within assessment year and failure to send estimate of advance-tax respectively - Whether since what section 148 enacts is to treat reassessment proceedings as assessment proceedings and proceed accordingly under section 139 and other provisions of act, levy of interest under section 139 under impugned assessment order was justified and proper - Held, yes - Whether point of time with respect to which it has to be seen whether person had been previously assessed or not is limit indicated in section 212(3) for filing estimate concerned, therefore, impugned order imposing penal interest on assessee under section 139(1) and (3) was right - Held, yes FACTS The ITO initiated reassessment proceedings against the assessee under the provisions of section 148 read with section 139, and also levied penal interest under section 217. The assessee filed writ petition contending that the levy of interest under the impugned orders under the provisions of section 139(1) and (3) was unsustainable in law. HELD Reassessment proceedings under sections 147 and 148 are started because the income has escaped asseesment for reasons which may range-as was put in a decision of the High Court-from "the stupidity of the officer to the cupidity of the assessee". These may well befall long after the period of time contemplated by section 139 and the various sub-clauses and provisos thereto. To read section 148 as rendering action under section 139 impossible in such circumstances, would be destructive of the very object and purpose of the reassessment proceedings sanctioned by the section. What section 148 enacts is to treat the reassessment proceedings as assessment proceedings and proceed accordingly under section 139 and other provisions of the Act. It was, therefore, to be held that the levy of interest under the impugned assessment orders under the provisions…

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