Law:

Section:

Section 153 of the Income-tax Act, 1961 - Assessment - Time limit for completion of - Assessment year 1968-69 - Assessee-firm filed its revised return with audited balance sheet and profit and loss account on 9-2-1972 - ITO estimated rate of net profit at 10 per cent instead of 7 per cant as estimated by assessee and made ex parte assessment order on 21-3-1973, i.e., after expiry of period of limitation of one year from date of filing of revised return - He further recorded in assessment order that penalty proceedings under section 271(1)(a), 271(1)(c) and 140A(3) had been initiated against assessee - As there was a change in incumbent of office of ITO, successor-ITO in accordance with principle of natural justice gave opportunity to hear assessee afresh before completing assessment - Whether time taken by successor - ITO to reopen whole or any part of proceedings or to give an opportunity to assessee could not be excluded under section 153(3) as there was no such demand from assessee under section 129 and, thus, assessment was time barred - Held, yes Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - Whether having regard to facts stated under head 'Assessment - Time limit for completion of, penalty was not leviable in absence of a valid assessment - Held, yes Facts For the assessment year 1968-69, the assessee-firm filed its revised return with audited balance sheet and profit and loss account on 9-2-1972. The ITO found that the assessee had declared its net profit at 7 per cent of the total receipts which he considered to be too low. The ITO estimated the rate of net profit at 10 per cent, computed the income accordingly and made an ex parte order of assessment on 21-3-1973. The penalty proceedings under section 271(1)(a) were also initiated. On appeal, the assessee contended before the AAC that the assessment was barred by limitation as the same had not been completed within one year from the date of filing of the revised return. The AAC held that there was a prima facie case of concealment inasmuch as even the revised return filed subsequently by the assessee was neither complete nor correct. The AAC further held that…

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