JUDGMENT Devinder Gupta, J.—Income-tax Appellate Tribunal Chandigarh Bench, Chandigarh, has, at the behest of the assessee, referred the following question of law to this Court:— "Whether, in the facts and in the circumstances of the case, the Tribunal was right in law in holding that the imposition of penalty under section 271 (i) (c) by the Inspecting Assistant Commissioner vide his order dated 23-5-1977 was within the period of limitation prescribed under section 275 of the Income-tax Act, 1961 ?" 2. The assessee was assessed in the status of HUF for the assessment year 1965-66, which was completed under section 143 (3) of the Income-tax Act, 1961 (hereinafter referred to as the Act) on March 17, 1970 on a total income of Rs. 1,02,300, on the basis of a return, which had been filed by the assessee on August 7, 1965, declaring his total income at Rs. 11,093.50, which was later on revised to Rs. 89,318 on August 10, 1967. The Inspecting Assistant Commissioner on March 24, 1972, levied a penalty under section 271 (i) (c) of the Act on the basis of this assessment. On an appeal having been preferred by the assessee on the assessment, the Tribunal vide its order dated November 5, 1973, set aside the assessment and remanded the case to the Income-tax Officer with a direction to make fresh assessment in accordance with law. Since the basis for imposing penalty by the Inspecting Assistant Commissioner, namely, the order of assessment had been cancelled, the Tribunal vide his order dated January 10, 1974, cancelled the penalty imposed on March 24, 1972. 3. The Income-tax Officer on September 13, 1974, completed the fresh assessment and again determined the total income of the assessee at Rs 1.02.300 and further held that the assessee had concealed income from Karyana shop by alteration and manipulation in the account books and further that the assessee also did not disclose any income from the contract business in the original return filed by him. On the basis of this finding, notice under section 274 read with section 271 (1) (c) was issued to the assessee to show cause as to why penalty be not imposed. As the penalty imposable exceeded the statutory limit, prescribed for Income-tax Officer, the proceedings were referred to the Inspecting Assistant Commissioner. On the basis of this finding, notice under section 274 read with section 271 (1) (c) was issued to the assessee to show cause as to why penalty be not imposed. As the penalty imposable exceeded the statutory limit, prescribed for Income-tax Officer, the proceedings were referred to the Inspecting Assistant Commissioner. In the meanwhile, the appeal preferred by the assessee against the fresh order of assessment was dismissed by the Appellate Assistant Commissioner on June 6, 1975 and by the Income-tax Appellate Tribunal on January 21, 1977. After the disposal of the appeal by the Appellate Tribunal, the Inspecting Assistant Commissioner on May 23, 1977, passed an order imposing penalty for concealment This order was further challenged by the assessee before the Income-tax Appellate Tribunal. 4. When the matter was pending before the Tribunal, the assessee gave up his challenge on merits to the order imposing penalty but pressed his challenge on legal grounds by urging that the order imposing penalty was barred by limitation. It was urged by him that since the original assessment was completed on March 17, 1970, therefore, an order imposing the penalty, if any, could have been imposed only within a period of two years from that date. Rejecting his contention, the Tribunal held that when the original order of assessment was set aside in appeal, earlier proceedings came to an end and the only relevant assessment was the order passed by the Income-tax Officer on September 30, 1974. This fresh order of assessment was challenged In appeal, which was finally decided on January 21, 1977, therefore, the order passed on May 23, 1977, was within the period of limitation prescribed under section 273 of the Act. The assesste, thereafter sought reference to this Court and this is bow the aforementioned question of law has been referred. 5. We have heard the learned Counsel for the assessee as well as for the Revenue and gone through the record of the case. The assesste, thereafter sought reference to this Court and this is bow the aforementioned question of law has been referred. 5. We have heard the learned Counsel for the assessee as well as for the Revenue and gone through the record of the case. Before we advert to the respective contentions made by the Counsel for the parties, it would be pertinent to glance through the provisions of law applicable to the facts of the present case, section 275 of the Act, as it originally stood, was as under 5— "Bar of limitation for imposing penalty.—No order imposing a penalty under this Chapter shall be passed after the expiration of two years from the date of the completion of the proceedings in the course of which the proceedings for the imposition of penalty have been commenced. Explanation.—In computing the period of limitation for the purpose of this section, the time taken in giving an opportunity to the assessee to be reheard under the proviso to section 129 and any period during which a proceeding under this Chapter for the levy of penalty is stayed by an order or injunction of any court shall be excluded." By the Taxation Laws (Amendment) Act, 1970, which came into force on and with effect from April 1, 1971, the main section was substituted for the following, but the explanation remained unaltered :— "(a) in a case where the relevant assessment or other order is the subject-matter of an appeal to the Deputy Commissioner (Appeals) or the Commissioner (Appeals) under section 246 or an appeal to the Appellate Tribunal under sub-section (2) of section 253, after the expiration of a period of— (i) two years from the end of the financial year in which the proceedings, in the course of which action for imposition of penalty has been initiated, are completed, or (ii) six months from the end of the month in which the order of the Deputy Commissioner (Appeals) or the Commissioner (Appeals) or, as the case may be, the Appellate Tribunal is received by the Chief Commissioner or Commissioner, whichever period expires later ; (b) in any other case, after the expiration of two years from the end of the financial year in which the proceedings, in the course of which action for imposition of penalty has been initiated are completed." 6. The learned Counsel for the assessee has contended that period of two years referred to in section 275 is mandatory and applies not only to the proceedings, which were completed for the first time by the Income tax Officer but also the proceedings that ensue pursuant to the order of remand passed by the Appellate Authority remanding the matter to the lower authorities. In other words, it was contended that irrespective of the order of remand, order imposing penalty could not have been passed beyond the period of two years from March 17, 1970. In support of Ms contention, the learned Counsel submitted that it was the intention of the legi slature while prescribing period of limitation that penalty proceedings, which are essentially in the nature of quasi criminal proceedings should be completed with the least possible delay. Reliance was placed by him on a decision of the Andhra Pradesh High Court in Additional Commissioner of Income-tax, A. P. v. N. V, Ganpathi Ram, (1987) 159 ITP 178, whenin " it has been held that the period of limitation of two years prescribed under section 275 of the Act applies not only to the proceedings, which were completed for the first time by the Income-tax Officer but also to the proceedings taken subsequently pursuant to an order of remand passed by the Appellate Authority remanding the matter to the lower authorities and this period of limitation could not be extended merely for the reason that the superior Tribunal has set aside the first order made by the income-tax Officer and directed him to make the order afresh. The order imposing penalty should be passed within the prescribed limit from the date of the first order passed by the first authority. 7. In reply to the arguments of the learned Counsel for the assessee, learned Counsel for the revenue submitted that section 275 of the Act sets out the prescribed period of limitation for passing an order of penalty and it uses the words which are crucial as regards the starting of penalty proceedings. 7. In reply to the arguments of the learned Counsel for the assessee, learned Counsel for the revenue submitted that section 275 of the Act sets out the prescribed period of limitation for passing an order of penalty and it uses the words which are crucial as regards the starting of penalty proceedings. Prior to the Taxation Laws (Amendment) Act, 1970, the provision required the penalty order to be passed within two years from the date of the completion of the proceedings in the course of which the proceedings for the imposition of it had commenced, which language enacted that penalty proceedings should commence in the course of and before the completion of the proceedings in which the Income-tax authorities were satisfied about the default which attracted the penalty. The amendment carried out, which came into force on and from April 1, 1971, did not make any change in the law as regards time limit for commencement of penalty proceedings The crucial words, according to the learned Counsel for the revenue, are : "in which the proceedings, in the course of which action for imposition of penalty has been initiated, are completed". It was urged that as the first order of assessment made on March 17, 1970, was set aside on November 5, 1973, order imposing penalty initiated in the course of earlier proceedings for assessment was also cancelled on January 10, 1974, and it was in pursuance to the order of remand that fresh order of assessment was made on September 30, 1974 during which assessment proceedings for imposition of penalty had been initiated, therefore, the order imposing penalty was within period of limitation. In other words, the argument of the learned Counsel for the Revenue was that where assessment order had been set aside in appeal and proceedings had been remanded for fresh disposal, it was the date of fresh assessment order and not the date of original assessment order which was relevant for the purpose of limitation for initiation of proceedings imposing penalty. Reliance was placed by the learned Counsel on a decision of the Andhra Pradesh High Court on Seetharama Lakshmi Rice and Groundnut Oil Mill Contractors Co. v. Income-tax Officer, K-Ward Vijayawada and others, (1978) 111 ITR 212. 8. Reliance was placed by the learned Counsel on a decision of the Andhra Pradesh High Court on Seetharama Lakshmi Rice and Groundnut Oil Mill Contractors Co. v. Income-tax Officer, K-Ward Vijayawada and others, (1978) 111 ITR 212. 8. By looking at the provisions of section 275, it would be seen that wherever there has been an appeal against the assessment order or other order and if the matter reaches a finality, the period as fixed by sub-clause 2 (i) of clause (a) is six months from the end of the month in which the aforesaid final order is received by the Commissioner. In cases where the proceedings arc not completed with the order of Appellate Assistant Commissioner or the Appellate Tribunal, clause 2 (ii) would have no application but when there is no appeal, penalty can be levied within a period of two years from the end of the final order in which the proceedings are completed. The emphasis is on the words "the proceedings .........are completed". When the proceedings imposing penalty, initiated with the assessment originally made were subsequently dropped and set aside after the proceedings for assessment which were taken in appeal to the higher authorities and were set aside with an order of remand with a direction to make a fresh assessment, it cannot be said that the proceedings for assessment were completed on the date when the first order of assessment was made As pointed out, the emphasis is on the words "proceedings.........are completed". The effect of order of remand is to remove from the file the order appealed against and when the original order of assessment is taken away, there is no assessment. As such, it is the order passed subsequently which is relevant and not the earlier one, which had been set aside. "The relevant assessment or other order" occurring in sub-clause (a) obviously refers to the subsequent assessment made by the Income-tax Officer after remand The first assessment cannot, by any stretch of imagination, be considered to be "relevant assessment proceedings or other order". 9. The proceedings in the instant case were initiated with the fresh order of assessment. "The relevant assessment or other order" occurring in sub-clause (a) obviously refers to the subsequent assessment made by the Income-tax Officer after remand The first assessment cannot, by any stretch of imagination, be considered to be "relevant assessment proceedings or other order". 9. The proceedings in the instant case were initiated with the fresh order of assessment. The decision in Seetharama Lakshmi’s case (supra) squarely applies to the facts of the present case, where provisions of section 275 have been correctly analysed by holding that it is the fresh assessment made by the Income-tax Officer after remand, which should be taken as the relevant assessment and not the first assessment prior to remand. The subsequent judgment of the Andhra Pradesh High Court in Ganapathi Rams case (supra) has not take note of the decision in Seetharama Lakshmi’s case. 10. We are, therefore, in full agreement with the law laid down by the Andhra Pradesh High Court in Seetharama Lakshmis case and hold that where the original assessment order is set aside in appeal, there is no subsisting assessment order till completion of fresh assessment and it is the date of the fresh order of assessment which is relevant for computing the period of limitation for initiating proceedings imposing penalty. In view of the above, reference is answered in the affirmative, that is, in favour of the revenue and against the assessee. Order accordingly. -