9911796707
|
Home
Issues:
Failure to file return within stipulated period and imposition of penalty under section 271(1)(a)(i)(b) of the Income-tax Act, 1961 on a registered firm. Analysis: The case involved the failure of a registered firm, Harish Chand and Co., to file its income tax return within the specified deadline, leading to penalty proceedings under section 271(1)(a)(i)(b) of the Income-tax Act, 1961. The firm was required to file the return by July 31, 1978, but failed to do so until April 7, 1982. The tax payable by the firm was Rs. 2,550, while the tax deducted at source was Rs. 4,050, resulting in no tax assessed as payable during the assessment. Despite this, the Income-tax Officer imposed a penalty of Rs. 7,660 by treating the firm as unregistered, a decision later overturned by the Appellate Assistant Commissioner and upheld by the Tribunal. The primary legal questions raised in this case were whether a penalty could be imposed on a registered firm when the tax assessed on it was nil, even though it would be liable to tax as an unregistered firm, and whether the Tribunal was correct in confirming the Appellate Assistant Commissioner's decision. Conflicting views from different High Courts were presented on this issue. One perspective, supported by various High Courts, argued that a registered firm liable to penalty should be treated as unregistered for penalty calculation purposes. However, the High Court of Rajasthan held that if the entire tax amount has been paid, no penalty on the assessed tax should be imposed, as the assessed tax would be zero in such cases. The judgment concurred with the view of the High Court of Rajasthan, emphasizing that no penalty is payable when the tax deducted at source or paid in advance equals or exceeds the assessed tax payable by a registered firm. This decision aligned with the Supreme Court's rationale in a related case, emphasizing that when the advance tax paid covers the total assessed tax, no penalty should be charged. Consequently, both questions were answered in favor of the assessee, and the reference was disposed of without costs.
|
