1994 (1) TMI 121 - AT - Income Tax

Summary

Issues:
- Deletion of penalty under section 271(1)(a) of the IT Act, 1961 for delay in filing the return for the assessment year 1981-82.

Detailed Analysis:

1. Deletion of Penalty Grounds:
- The primary issue in this case was the deletion of the penalty of Rs. 26,218 under section 271(1)(a) of the IT Act, 1961, relating to the delay in filing the return for the assessment year 1981-82.

2. Assessing Officer's Decision:
- The Assessing Officer levied the penalty due to a delay of 32 months in filing the return, as the due date was 31st July, 1981, but the return was filed on 31st March, 1984.

3. First Appellate Authority's Decision:
- The first appellate authority deleted the penalty based on the grounds that no demand of tax was created at assessment, and the tax paid or deducted at source exceeded the tax liability. The assessee, engaged in contract works, had tax deducted at source amounting to Rs. 23,848, while the total tax on regular assessment was Rs. 19,678 with no tax payable and no demand created.

4. Arguments Presented:
- The counsel for the assessee argued that the refund of Rs. 4,070 was obtained, while the Departmental Representative contended that the delay was unjustified as the assessee did not seek an extension of time despite obtaining most TDS certificates by July 1982.

5. Legal Precedents and Interpretation:
- The counsel relied on various court decisions, including the Gauhati High Court and Madras High Court, emphasizing that if the tax liability was met through advance tax or TDS, penalty should not be levied for delayed filing. The Punjab & Haryana High Court decisions also supported this stance.

6. ITAT Decision:
- After considering the facts and legal precedents, the ITAT found the first appellate authority's decision to be legally sound. Since the tax was paid at source, no demand was created, and the penalty was rightly deleted.

7. Final Verdict:
- Consequently, the appeal was dismissed, affirming the deletion of the penalty under section 271(1)(a) of the IT Act, 1961 for the delay in filing the return for the assessment year 1981-82.