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- Appeal against order of CIT(A) IV, Bombay for asst. yr. 1979-80 - Imposition of penalty under s. 273(2)(a) of the IT Act 1961 Analysis: The appeal pertains to an assessee-company challenging the penalty imposed by the ITO under s. 273(2)(a) of the IT Act 1961 for the assessment year 1979-80. The assessee had filed an estimate of advance tax on 15th March 1979, but the ITO deemed this estimate to be untrue and imposed a penalty of Rs. 938. The CIT(A) upheld this penalty, leading to the further appeal before the Appellate Tribunal. The key contention raised by the assessee was that for the preceding assessment years 1976-77, 1977-78, and 1978-79, the assessments were completed on nil income, and therefore, there was no requirement to file a statement of advance tax as mandated by s. 209A(1)(a). The assessee argued that since there was no liability to file such a statement, the provisions of s. 209A(2), (3), or (4) were not applicable, and thus, the penalty imposed was unwarranted. The Appellate Tribunal carefully considered the submissions from both parties. It noted that as of the due date for the first instalment of advance tax on 15th June 1978, the latest completed assessment showed nil income. Consequently, the assessee had no obligation to file the statement of advance tax or estimate the advance tax under s. 209A. Given this context, the provisions of s. 209A(2) and (3) concerning estimation of advance tax based on current income did not apply to the assessee's situation. Similarly, s. 209A(4) regarding the excess advance tax payable was also deemed inapplicable as the assessee was not liable to furnish the required statements. The Tribunal emphasized that the assessee's actions in filing an estimate and paying tax based on it were beyond what was legally required. Citing the precedent set by the Hon'ble Supreme Court in Hindustan Steel Ltd. vs. State of Orissa (1972) 83 ITR 29 (SC), the Tribunal highlighted that the imposition of a penalty for failure to comply with statutory obligations is a quasi-criminal proceeding requiring judicial discretion based on relevant circumstances. Consequently, the Tribunal concluded that the penalty imposed by the ITO was unjustified and proceeded to cancel it. In light of the above analysis, the Appellate Tribunal allowed the appeal filed by the assessee, thereby overturning the penalty imposed under s. 273(2)(a) of the IT Act 1961 for the assessment year 1979-80.
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