2007 (7) TMI 254 - HC - Income Tax

Assessee filed its return under the Companies (Profit) Surtax Act - Section 9 would be attracted only if the Assessing Officer is satisfied that the assessee has failed to furnish the return without any reasonable cause as required by Section 5 - assessee in the present case having furnished the return within the time prescribed in section 5(3) cannot therefore be considered as having failed to furnish the return as required under section 5 penalty not leviable

Summary

Issues:
Interpretation of penalty provisions under the Companies (Profits) Surtax Act, 1964 for late filing of return.

Analysis:
The judgment pertains to a case where the Income-tax Appellate Tribunal referred a question of law regarding the imposition of a penalty for late filing of return under the Companies (Profits) Surtax Act, 1964. The assessee filed its return after the due date, and the Assessing Officer imposed a penalty. However, the Commissioner (Appeals) deleted the penalty, stating that no penalty was leviable if the return was filed before the assessment was completed. The Tribunal upheld this decision, citing judgments from the Allahabad and Calcutta High Courts.

The crux of the issue lies in the interpretation of Sections 5 and 9 of the 1964 Act. Section 5 mandates the filing of the return by a specified date, with provisions for extension by the Assessing Officer. Section 9 empowers the Assessing Officer to impose a penalty for failure to furnish the return without reasonable cause. The Tribunal, supported by the Kerala High Court decision, emphasized that the penalty under Section 9 is attracted only if the return is not filed without reasonable cause as required by Section 5.

The judgment underscores that the penalty provision in Section 9 is contingent upon the failure to furnish the return without reasonable cause. It clarifies that an assessee has the right to file the return before the assessment is completed, as per Section 5(3), and no penalty is applicable if the return is filed before assessment. The court concurred with the Kerala High Court's interpretation, affirming that the penalty is not applicable if the return is filed before assessment, even if it is after the due date.

In conclusion, the court upheld the decision of the Tribunal, ruling in favor of the assessee and against the revenue. The judgment provides a comprehensive analysis of the statutory provisions and judicial interpretations regarding the imposition of penalties for late filing of returns under the Companies (Profits) Surtax Act, 1964.