1990 (12) TMI 118 - AT - Income Tax

Summary

Issues:
Penalty under section 271(1)(a) of the Income-tax Act for late filing of income tax return by a registered firm.

Analysis:
The appeal was against the order of the Appellate Assistant Commissioner dated 1st January, 1986, regarding the assessment year 1980-81. The Income Tax Officer (ITO) initiated penalty proceedings under section 271(1)(a) due to the late filing of the return of income by the registered firm. The penalty of Rs. 9,416 was imposed by the Assessing Officer, which was upheld by the AAC.

The counsel for the assessee argued that the delay in filing the return was due to unavoidable circumstances. It was contended that the firm had paid advance tax and TDS exceeding the total tax payable, resulting in a refund to the assessee. Citing relevant case laws, the counsel argued that no tax was due upon completion of assessment, hence penalty under section 271(1)(a) was not applicable.

The Departmental Representative countered by stating that the Supreme Court decision cited by the assessee did not involve the question of penalty. It was argued that the decisions of the Rajasthan High Court and the Bombay High Court supported the imposition of penalty on registered firms even if no tax liability existed. The Departmental Representative emphasized that the Bombay High Court's decision was binding in this case.

The Tribunal analyzed the arguments and case laws presented. It noted that the Supreme Court decision did not address the imposition of penalty under section 271(1)(a). While the Rajasthan High Court decision supported the assessee's stance, the Bombay High Court decision and subsequent decisions from other High Courts upheld the imposition of penalty on registered firms without tax liability. The Tribunal, aligning with the Bombay High Court's decision and the High Court of Madhya Pradesh, concluded that the penalty was rightly levied in this case, affirming the AAC's order.

Therefore, the Tribunal dismissed the appeal, upholding the penalty imposed under section 271(1)(a) of the Income-tax Act for the late filing of the income tax return by the registered firm for the assessment year 1980-81.