Judgment

GROVER, J.:- The respondent company which is an assessee was required by the Income-tax Officer by notices issued under Sec. 18-A (1) of the Indian Income-tax Act 1922, hereinafter called the "Old Act" to make an advance payment of tax amounting to Rs. 3,17,077 for the assessment year 1960-61 and Rs. 3,54,911 for the assessment year 1961-62. The assessee chose to file its own estimate of tax under Section 18-A (2) and in accordance therewith it paid two instalments of advance tax of Rs 38,333/each for the assessment year 1960-61 and three instalments of Rs. 12,875/- each for the assessment year 1961-62. Thereafter the assessee filed revised estimates of tax in the month of March 1960 and March 1961 respectively estimating the tax at Rs. 1,80,000/- for each of the assessment years on a total income of Rs. 4 lakhs. The balance of advance tax as per its revised estimate was paid in time after deducting the instalments which had already been paid. The assessee subsequently filed its returns of income for the aforesaid two years declaring the total income of Rs. 4,53,942/- and Rupees 7,02,383/respectively. The Income-tax Officer completed the assessment of total income of Rs 5,35,000/- and Rs. 8,99,029/- for the assessment years 1960-61 and 1961-62 on January 21, 1963 after the Income-tax Act 1961, hereinafter called the "New Act" had come into force. The Income-tax Officer took the view that the assessee had furnished inaccurate and untrue estimates of tax and had not given any satisfactory explanation in respect of, them. He imposed penalties under Sec. 273 of the new Act amounting to Rs. 13,700/- and Rs. 12342/- for the assessment years 1960-61 and 1961-62 respectively. Appeals to the Appellate Assistant Commissioner in the matter of imposition of penalty were rejected. The Appellate Tribunal held that the penalties could not have been imposed under the provisions of Sec. 273 of the new Act in respect of the two assessment years in question. It was said, inter alia that in the absence of any deeming provision in the new Act the default under Sec. 18-A of the old Act could not be treated as a default under Sec. 212 of the new Act and that Section 297 (2) (g) of the new Act did not save the proceedings under Sec. 18-A of the old Act. A question of law was referred directly to this Court under the provisions of Sec. 257 of the new Act owing to the conflict between the decision of the various High Courts.

2. Section 18-A of the old Act makes provision for advance payment of tax. Sub-section (9) provides, inter alia for the imposition of penalty if the Income-tax Officer is satisfied that the assessee has furnished estimates of the tax payable by him which he knew or had reason to believe to be untrue, In the new Act S. 212 makes provision for the estimate by the assessee and payment of tax in accordance with that estimate Section 273 of the new Act empowers the Income-tax Officer to levy penalty on an assessee where he finds at the time of regular assessment that the assessee had furnished, under Sec. 212, an estimate of the advance tax payable by him which he knew or had reason to believe to be untrue.

3. As stated before the Tribunal was of the opinion that Sec. 297 (2) (g) of the new Act did not save proceedings under Sec. 18-A of the old Act. According to that provision any proceeding for the imposition of a penalty in respect of any assessment for the year ending on 31st day of March 1962 or any earlier year which is completed on or after the first day of April 1962 may be initiated and any such penalty may be imposed under the new Act.

4. In M/s Jain Bros. v. The Union of India, Civil Appeal No 1593 of 1969, D/-18-l 1-1969 this Court examined the provision of Section 271 which also appears in Chapter XXI under which Sec. 273 is to be found and the provision of S. 297 (2) (g) of the new Act. This is what was stated in that case:

"We are further unable to agree that the language of Sec. 271 does not warrant the taking of pro