Law:

Section:

Section 273, read with sections 274 and 297(2)(g), of the income tax act, 1961-Penalty-For furnishing false estimate of advance tax-Though assessee was liable to penalty for filing false estimate of advance tax, ito mentioned in notice issued under section 273 that assessee had failed to furnish estimate of advance tax-whether mention of such incorrect charge would render penalty proceedings void ab initio-held, no-whether provisions of the 1961 act would only apply for levy of penalty in cases where assessments were completed under the 1922 act, after the 1961 act came into force-held, yes Facts For the assessment years 1960-61 and 1961-62 the assessee filed estimates of advance tax voluntarily and paid the advance tax accordingly. On regular assessments the tax payable by the assessee was substantially higher than the advance tax paid by it. Consequently, the ITO imposed penalty on the assessee on the basis of the shortfall in the advance tax paid as compared with the tax finally assessed as payable, but in the notices issued under section 274 read with section 273(b) he had incorrectly mentioned that the assessee had failed to file its estimate of advance tax. The assessee, therefore, contended before the AAC that the notices were ab initio void as the charge mentioned therein was wrong. The AAC observed that the notices should have charged the assessee with default under section 18A(9) of the 1922 Act or section 212(3) of the 1961 Act, but held that there was a partial default of the assessee and since there was no minimum limit for the penalty leviable under section 18A(9) of the 1922 Act, reduced the penalty to a token figure of Rs. 500 in respect of the assessment year 1960-61, which was substantially lower than that imposed by the ITO. So far as the assessment year 1961-62 was concerned, the AAC dropped the proceedings on the ground that in that year the assessee was an old assessee and it was incumbent on the department to have issued an advance tax notice to the assessee, and that since no such notice had been issued, there was no default on the part of the assessee. On appeal by the revenue, the Tribunal upheld the assessee's plea that the notices…

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