1987 (11) TMI 124 - AT - Income Tax

Summary

Issues:
1. Levy of penalties under the Income-tax Act and the Compulsory Deposit Act.
2. Dispute regarding the penalty for non-payment of compulsory deposit.
3. Interpretation of provisions related to compulsory deposit and current income.
4. Assessment of liability to pay compulsory deposit based on current income calculation.
5. Consideration of whether the assessees are liable to pay compulsory deposit.

Detailed Analysis:
1. The judgment involves appeals by partners in a firm of contractors against penalties levied under the Income-tax Act and the Compulsory Deposit Act. A common order was passed for convenience.
2. The specific dispute in ITA Nos. 1867 and 1864/Hyd./1985 relates to the penalty for non-payment of compulsory deposit. The assessees had not paid the deposit during the year but made the payment before the assessment was completed. The Income-tax Officer imposed the penalty, which was upheld in the first appeal.
3. The arguments presented before the tribunal included the submission that no penalty should be levied as the assessees had not submitted advance tax statements. The tribunal considered the provisions of the Compulsory Deposit Act, particularly the definition of "current income," which is crucial in determining liability.
4. The tribunal analyzed the definition of "current income" under the Compulsory Deposit Act, emphasizing that it can be ascertained based on various scenarios outlined in the Act. In this case, the assessees had not submitted the required advance tax statements, impacting the calculation of their current income.
5. Ultimately, the tribunal concluded that since the assessees had not sent the necessary advance tax statements as required by law, their current income could not be ascertained per the provisions of the Act. As a result, the tribunal held that the assessees were not liable to pay the compulsory deposit, vacating the penalties imposed on them.

In conclusion, the tribunal partly allowed some appeals, dismissed others, and allowed the appeals specifically related to the penalty for non-payment of compulsory deposit. The judgment centered on the interpretation of statutory provisions regarding compulsory deposit liability based on the calculation of current income, highlighting the importance of complying with procedural requirements under the law.