1990 (11) TMI 70 - HC - Income Tax

Summary

Issues Involved:

1. Legality of levying penalty under Section 17A(3) of the Kerala Agricultural Income-tax Act, 1950.
2. Interpretation of Section 17A(3) concerning the delayed filing of returns and payment of admitted tax.
3. Validity of the orders passed under Exhibits P-4 and P-6.

Issue-wise Detailed Analysis:

1. Legality of Levying Penalty under Section 17A(3):

The petitioner, a registered company and an assessee under the Kerala Agricultural Income-tax Act, 1950, challenged the legality of the penalty levied under Section 17A(3). The petitioner contended that there is no power for levying penalty under Section 17A(3) when the admitted tax is paid before filing the return and proof of payment is submitted with the return. The Government Pleader argued that Section 17A was introduced to ensure advance payment of admitted tax and that penalties could be imposed even if the return is filed late but the tax is paid.

2. Interpretation of Section 17A(3) Concerning Delayed Filing of Returns and Payment of Admitted Tax:

The court examined the scheme of the Act and the significance of different provisions. Section 17A, introduced by Amendment Act 17 of 1980, is a complete code regarding self-assessment and advance payment of tax. Sub-section (1) mandates that the admitted tax must be paid before furnishing the return, accompanied by proof of payment. Sub-section (3) allows for a penalty if the admitted tax or any part of it is not paid. The court noted that Section 17A(3) does not extend to cases of delayed filing of returns; it only addresses non-payment or partial payment of admitted tax. The court referenced Section 140A of the Income-tax Act, which was similar to Section 17A(3), and decisions under the Income-tax Act that supported the petitioner's interpretation.

3. Validity of the Orders Passed under Exhibits P-4 and P-6:

The court found that the authorities misinterpreted the law. The Inspecting Assistant Commissioner and the Commissioner failed to consider Section 17(3), which allows for late filing of returns and specifies the consequences. The court concluded that Section 17A(3) could not be used to levy a penalty for late filing when the admitted tax is paid. The authorities' interpretation was inconsistent with the provisions for penalties, fines, and prosecution under Sections 20(1), 52, and 53. Consequently, the orders in Exhibits P-4 and P-6 were quashed.

Conclusion:

The original petition was allowed, and the orders under Exhibits P-4 and P-6 were quashed. The petitioner was entitled to costs, with the advocate's fee fixed at Rs. 1,000.