2003 (9) TMI 71 - HC - Income Tax

Penalty u/s 273(1)(b) - wilful default opportunity - Being aggrieved by the decision of the Tribunal deleting the penalty imposed by the Assessing Officer the Department has filed this appeal under section 260A - Before the assessee could appear before the Assessing Officer on December 11 1989 the order under section 273(1)(b) was passed by the Assessing Officer ex parte. This order was passed ex parte on November 30 1989. Therefore the assessee had no opportunity to put its case before the Assessing Officer. Therefore it is not a case of a new point being raised by the assessee. In the present case the appellate authority and the Tribunal have come to the conclusion concurrently that there was no wilful default on the part of the assessee - Tribunal was right in deleting the penalty

Summary

Issues:
Penalty imposed under section 273(1)(b) of the Income-tax Act for the assessment year 1988-89.

Analysis:
The case involved an appeal by the Department against the Tribunal's decision to delete the penalty imposed by the Assessing Officer under section 273(1)(b) of the Income-tax Act for the assessment year 1988-89. The assessee had filed its return of income declaring a loss, and the Assessing Officer imposed a penalty of Rs. 50,000 for failing to submit an estimate of advance tax under Form No. 29. The appellate authority found that the assessee had filed Form No. 29 but committed a technical default by not filing the statement in Form No. 28A. The penalty was deleted by the appellate authority and confirmed by the Tribunal on the grounds that there was no wilful default on the part of the assessee.

The Department argued for remand, claiming that the assessee had raised a new case before the appellate authority. However, the court found no merit in this argument. It was noted that the proceedings under section 273(1)(b) were fixed for hearing, but the order was passed ex parte before the assessee could appear, depriving them of the opportunity to present their case. The court emphasized that there was no new point raised by the assessee and that the appellate authority and the Tribunal had concurred on the absence of wilful default by the assessee.

The court referred to the case law of Hind Products (P) Ltd. v. CIT [1980] 121 ITR 903 (Bom), highlighting that the estimated income for advance tax purposes may differ from the ultimate reported income and that such discrepancies do not necessarily indicate wilful default. Given the concurrent findings of no wilful default by both the appellate authority and the Tribunal, the court dismissed the appeal, upholding the deletion of the penalty. No costs were awarded in the matter.