1984 (6) TMI 71 - AT - Income Tax

Summary

Issues:
1. Appeal against the cancellation of penalty under section 273(1)(b) of the Income-tax Act, 1961 for the assessment year 1980-81.
2. Interpretation of section 209A(1) of the Act regarding the obligation to file a statement for advance tax paid.
3. Application of the principles laid down in Hindustan Steel Ltd. v. State of Orissa [1972] 83 ITR 26 to determine the imposition of penalty for failure to fulfill a statutory obligation.

Detailed Analysis:
1. The appeal before the Appellate Tribunal ITAT Amritsar concerned the cancellation of penalty under section 273(1)(b) of the Income-tax Act, 1961 for the assessment year 1980-81. The appeal was taken up along with two similar appeals, and the facts of all three cases were found to be similar. The Tribunal noted that the decision in this appeal would also govern the disposal of the other two appeals. The appeals were disposed of after considering written submissions and relevant documents, including the failure of the assessees to file the required statement under section 209A(1) of the Act.

2. The relevant facts in each case indicated that the assessees had paid advance tax by the due date but failed to file the necessary statement as required by section 209A(1) of the Act. The Income Tax Officer (ITO) imposed penalties on the assessees for this failure. The Tribunal focused on whether, in the given factual background, a penalty could be rightfully imposed by the ITO. The Tribunal relied on the principles established in the Supreme Court decision of Hindustan Steel Ltd. v. State of Orissa [1972] 83 ITR 26, emphasizing that a penalty for failure to fulfill a statutory obligation should be imposed judiciously, considering the circumstances and intent of the defaulter.

3. The Tribunal concluded that the penalties imposed by the ITO were unwarranted as the failure to file the statement was deemed a technical or venial breach of the law. The Tribunal highlighted that the assessees had paid the advance tax due for the first installment and subsequently filed additional estimates, indicating a good faith effort to comply with their tax obligations. Therefore, the Tribunal upheld the decision of the Appellate Authority Commissioner (AAC) to cancel the penalties, citing that the penalties were not justified in the given circumstances. Consequently, the appeal of the revenue was dismissed by the Tribunal, affirming the cancellation of the penalties under section 273(1)(b) for the assessment year 1980-81.