Law:

Section:

Section 273(a)of the Income-tax Act, 1961 [as it stood before 1-06-197 8j - Penalty - For furnishing false estimate of advance tax - Assessment year 1972-73, relevant to accounting year ended 31-07-1971 - Assessee partner paying less advance tax, based on his own income estimate dated 15-09-1971 under section 212, vis-a-vis ITO's demand under section 210 - penalty for default under section 273(a) levied by ITO and upheld by AAC - Tribunal deleted penalty Whether tribunal correct in holding that assessee's estimate could not be said to be knowingly untrue Held, yes - Whether tribunal correct in holding that, after penalising firm under section 273(a), penalty could not be imposed on its partners under same section - Held, yes Facts The assessee-firm consisted of four partners, including the partner PC. For the assessment year 1972-73, the ITO issued a notice under section 210 on 19-08-1971 requiring the assessee to deposit advance tax of Rs. 2,96,285. The assessee filed an estimate on 15-09-1971 declaring his income at Rs. 1,10,000 and accordingly paid Rs. 53,037. The tax on regular assessment was determined at Rs. 1,32,774. As the advance tax estimate filed on 15-09-1971 was found to be incorrect, penalty proceedings under section 273(a) were initiated. The assessee contended (i) that his only source of income was the share out of firm's estimated income, and in tune with the firm's estimate, he believed his estimate to be true and correct; and (ii) that, since the ITO did not prove that he bad consciously underestimated his advance tax liability, no penalty was leviable. The ITO did not find the assessee's explanation acceptable and imposed a penalty of Rs. 4,654. The assessee's appeal before the AAC was unsuccessful. On further appeal, the Tribunal deleted the penalty, holding (i ) that the assessee's estimate dated 15-09-1971 depended upon the firm's estimate and he could not be said to be actuated by a dishonest intention to underestimate his advance tax liability; and (ii) that, since a penalty under section 273(a) had already been levied on the firm for default under section 212, no penalty could be imposed on the partner on the same offence as it would…

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