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Issues:
- Assessment of penalty for late deposit under the Compulsory Deposit Scheme, 1974 for two assessees. - Applicability of penalty under section 10. - Interpretation of provisions of Compulsory Deposit Scheme (Income-tax Payers) Act, 1974. - Consideration of reasonable cause for late payment. - Comparison with provisions of advance tax payment under section 211. - Analysis of relevant case laws and judgments. Analysis: The judgment by the Appellate Tribunal ITAT Delhi-E pertains to three appeals by the revenue concerning the assessment years 1979-80 and 1982-83 for two assessees. The issues in all appeals being common, they were disposed of together. The primary concern was the late deposit under the Compulsory Deposit Scheme, 1974 by the assessees, leading to penalties imposed by the Income-tax Officer. In the case of the two assessees, it was found that there were shortfalls in the compulsory deposits made, resulting in penalties levied by the Income-tax Officer. The assessees contended before the CIT (Appeals) that although the deposits were short, they were made within the previous year relevant to the assessment years. They argued that due to wrong advice from their Chartered Accountant, the defaults occurred without any mens rea, constituting a reasonable cause for the delay. The CIT (Appeals) considered the arguments and deleted or reduced the penalties based on the assessees' contentions of reasonable cause. The decisions were supported by various case laws such as Lachman Chaturbuj Java v. R. G. Nitsure and CWT v. Ramniklal D. Mehta. The revenue department, however, was aggrieved by these decisions and appealed. During the appeal, the Departmental Representative argued that no mens rea was required to prove default and cited the Supreme Court decision in Gujarat Travancore Agency v. CIT. On the other hand, the assessees' counsel highlighted the provisions of the Compulsory Deposit Scheme (Income-tax Payers) Act, 1974, and compared them with the requirements of advance tax payment under section 211 of the Income-tax Act. The Tribunal analyzed the provisions of the Compulsory Deposit Scheme Act and noted the similarity with advance tax payment requirements under section 211. It observed that the assessees' late payments were made within the financial year, aligning with the principles established by various High Courts and the Supreme Court. The introduction of "reasonable cause" in section 10 of the Compulsory Deposit Scheme Act was crucial in considering the assessees' situation due to wrong advice from their counsel. Ultimately, the Tribunal upheld the CIT (Appeals)'s decision, emphasizing that the assessees had a reasonable cause for the late payments and that the penalties should be deleted or reduced. The appeals by the revenue were dismissed, affirming the decisions made in favor of the assessees.
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