Provisions u/s 272 (2)(a), 276(b) of Income Tax Act, 1961. - Income Tax - 1518/CBDT

INSTRUCTION NO. 1518/CBDT Dated: July 19, 1983 Section(s) Referred: 272(2)(a) ,276(b) Statute: Income - Tax Act, 1961 Under section 276 (b), in Chapter XXII- Offences and Prosecution) as it stood prior to 1st April. 1976, if a person failed without reasonable cause or excuse to furnish in due time any of the returns or statements mentioned in Section 133, Section 206, Section 285 or Section 286, he was liable to be punished with fine which might extend to ten rupees for every day during which the default continued. For this the Department had to file a complaint of prosecution and the punishment as mentioned above may be awarded on conviction by the Court. With effect from 1st April, 1976 Section 276(b) of Income-tax Act, 1961 was delected and section 272 was introduced in Chapter XXI-Penalties Imposable Sub-section (2) (a) of Section 272A provides that if a person, without reasonable cause or excuse fails to furnish in due time any of the returns or statements mentioned in Section 133, Section 206, Section 285, Section 285B or Section 286, he shall pay, by way of penalty, a sum which may extend to ten rupees for every day during which the failure continues. 2. The question, whether in respect of a default mentioned in section 276(b) of Income-tax Act. 1961, committed pior to 1st April, 1976 and the default continued after 1st April, 1976, the default was a continuing one and, if so, whether the provisions of section 276(b) would apply for the period prior to 1st April, 1976 and thereafter the provisions of section 272A(2)(a) would apply, was examined by the Board in consultation with the Ministry of Law, in the light of the judgements of the Supreme Court in the cases of (1) Brij Mohan Vs. CIT (1979) 120 ITR-1 and (2) C.W.T. Vs. Suresh Seth (1981) (129 ITR 328). The legal position is that a wrong or default which is complete but whose effect may continue to be felt even after its completion, is not a continuing wrong or default. Therefore, if a default mentioned u/s 276(b) has been committed prior to 1st April, 1976, only the provisions of Section 276(b) would apply and the provisions of section 272A(2)(a) would not apply even if the effect of the default continued to exist after 31st March, 1976.