1987 (3) TMI 65 - HC - Income Tax

Summary

Issues:
1. Whether penalty was leviable against the assessee firm under section 271(1)(a) of the Income-tax Act, 1961?

Analysis:
The judgment pertains to a reference under section 256(1) of the Income-tax Act, 1961, made at the instance of the Revenue. The main issue raised was whether a penalty was leviable against the assessee firm under section 271(1)(a) of the said Act. The assessee, a registered firm, filed its return late for the assessment year 1967-68, citing delays due to transactions under the National Defence Remittance Scheme. The Income-tax Officer imposed a penalty of Rs. 9,000, which was upheld by the Appellate Assistant Commissioner but later challenged by the assessee before the Income-tax Appellate Tribunal. The Tribunal ruled in favor of the assessee, leading to the present reference.

The Revenue, represented by Mr. Jetly, relied on previous judgments to support its argument that the penalty was exigible. Notably, the judgment referenced cases like CIT v. Janata Trading Co. and CIT v. N. G. K. Electrical Industries to strengthen its position. The court discussed the interpretation of section 271(1)(a) and 271(2) of the Income-tax Act, emphasizing the calculation of penalties for registered firms.

The court referred to judgments from other High Courts, including the Calcutta High Court, and discussed conflicting views on the issue at hand. It highlighted the provisions of section 271 and the specific treatment of penalties for registered firms under sub-section (2). The court rejected the assessee's argument that the previous judgments were erroneous and upheld the relevance of the Calcutta High Court's decision in Priya Gopal Bishoyee's case.

Additionally, the court addressed the contrary view presented by the Gauhati High Court in CIT v. Maskara Tea Estate but ultimately aligned with its own previous decisions and the interpretation provided in the N.G.K. Electrical Industries case. The judgment concluded by answering the reference question in the affirmative and in favor of the Revenue, indicating that penalties could be imposed on registered firms based on the provisions of the Income-tax Act, 1961.