1992 (8) TMI 100 - AT - Income Tax

Summary

Issues:
Levy of penalty under s. 271(1)(a) for delayed return filing and whether to follow a jurisdictional High Court decision based on a reversed Supreme Court decision.

Analysis:
The case involves the levy of penalty under section 271(1)(a) for a delayed return filing by 16 months. The assessee argued that the return was filed under a circular issued by the CBDT, seeking immunity from penalty. The penalty was imposed by the ITO based on the delay from the due date for filing the return to the date of filing the original return, considering a revised return filed later. The assessee contended that since the return was filed under an Amnesty Scheme, no penalty should be levied. However, the Commissioner rejected this plea due to lack of a clear finding by the ITO on the assessment order. Another argument raised was that as the assessee was entitled to a refund on assessment, no penalty should be imposed. This argument was dismissed, citing precedents like the Andhra Pradesh High Court decision in Vijay Builders and the Full Bench decision of the Patna High Court in Jamunadas Mannalal vs. CIT.

During the Tribunal hearing, the assessee emphasized the arguments made before the Commissioner and relied on decisions such as Laxmi Cut Piece Bhandar vs. ITO and ITO vs. Munilal & Co. Additionally, the assessee referred to the Ahmedabad Tribunal's decision in Dhirajlal & Bros. vs. ITO, where the Gujarat High Court's decision in CIT vs. Reshamwala Market, Surat was cited.

The Departmental Representative contended that the Gujarat High Court's decision in CIT vs. Reshamwala Market was based on a precedent that had been overruled by the Supreme Court. Further, the representative cited additional decisions to support the argument against following the Gujarat High Court's decision.

The Tribunal noted that although the precedent relied upon by the Gujarat High Court had been reversed by the Supreme Court, the High Court's decision had not been directly overturned. The Tribunal deliberated on the implications of not following a High Court decision that has not been clearly overruled by the Supreme Court, emphasizing the need for clarity on such matters to avoid future disputes. Ultimately, the Tribunal decided to apply the Gujarat High Court decision and canceled the penalty, leaving it to the High Court to reconsider its decision in light of the Supreme Court's ruling.

In conclusion, the appeal was allowed, and the penalty under section 271(1)(a) was canceled based on the Tribunal's interpretation of the relationship between the High Court decision and the Supreme Court ruling.