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Issues involved: Interpretation of penalty u/s 273(b) of the Income-tax Act, 1961 for non-filing of advance tax estimate before due date.
Summary: The High Court of Madras addressed the issue of penalty imposition u/s 273(b) of the Income-tax Act, 1961 in a case involving a shipping company. The company had filed an estimate of advance tax after the due date, leading to a penalty of Rs. 10,600 being levied by the Income-tax Officer. The Appellate Assistant Commissioner later canceled the penalty, stating that the delay was not deliberate and there was no contumacious conduct. The Tribunal upheld this decision, emphasizing that the estimate was filed on the last date and there was no deliberate defiance of law. The Department appealed, arguing that the penalty should stand due to the late filing of the estimate. However, the Court, following the principles laid down by the Supreme Court, ruled in favor of the assessee. It noted that the delay was minimal, and the assessee's lack of awareness of the law constituted a reasonable cause. Therefore, the penalty u/s 273(b) was rightfully canceled by the Tribunal, and the Court ruled in favor of the assessee, rejecting the Department's appeal.
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