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TMI Blog1982 (12) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... ervice Centre. The reference appears to have been necessitated by the fact that the Bench felt certain doubts as to the effect of the substitution of the provisions of section 140A(3) by the Taxation Laws (Amendment) Act, 1975 on the point as to whether the amendment could be said to have overcome the effect of the decision of the Madras High Court in the case of A. M. Sali Maricar v. ITO [1973] 90 ITR 116 declaring the provisions as they stood before the amendment to be ultra vires and unconstitutional. In other words, the point for consideration is as to whether the provisions of section 140A(3) as substituted by the Taxation Laws (Amendment) Act, 1975, with effect from 1-4-1976 would continue to be hit by the decision of the Madras High, Court mentioned above. We proceed to consider the point arising in this case and would follow the decision in the other two cases which were also heard analogously. 2. The facts in the present case are that the assessee submitted a return of income on 29-9-1978 disclosing an income of Rs. 89,560 and the tax payable on the basis of such return was Rs. 24,900. According to the provisions of section 140A(1) this amount should have been paid prior ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation Laws (Amendment) Act, 1975 and not the substituted provisions, to invoke that decision and cancel the penalty levied under the new provisions would mean striking down the provisions of section 140A(3) after its substitution from 1-4-1976 applying the principles stated in the decision of the Madras High Court in A.M. Sali Maricar's case, for which the Tribunal has no power to do. Before proceeding with the case, the representative had the benefit of perusing the order of the Third Member in that case. The submissions of the learned counsel for the assessee before us were firstly that the effect of the decision of the Madras High Court is that it is not competent for the Legislature to enact a provision for levy of penalty for non-payment of tax and, therefore, the Legislature had no power to enact even the amended provisions of section 140A(3) which is still a levy for non-payment of tax. It was, therefore, submitted that the provisions of section 140A(3) even after amendment suffered from the same infirmity, as shown by the Madras High Court in the earlier provisions before amendment and, therefore, the penalty levied must be struck down. 4. It was also submitted that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sideration before the Madras High Court in the case of A. M. Sali Maricar are as under : " 140A. Self-assessment --- (1) where a return has been furnished under section 139 and the tax payable on the basis of that return as reduced by any tax already paid under any provision of this Act exceeds five hundred rupees, the assessee shall pay the tax so payable within thirty days of furnishing the return .... (3) If any assessee fails to pay the tax or any part thereof in accordance with the provisions of sub-section (1), he shall, unless a regular assessment under section 143 or section 144 has been made before the expiry of the thirty days referred to in that sub-section, be liable, by way of penalty, to pay such amount as the Income-tax Officer may direct, and in the case of a continuing failure, such further amount or amounts as the Income-tax Officer may, from time to time, direct, so, however, that the total amount of penalty does not exceed fifty per cent of the amount of such tax or part, as the case may be : Provided that before levying any such penalty, the assessee shall be given a reasonable opportunity of being heard." The High Court found with reference to the prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 139 or section 148, after taking into account the amount of tax, if any, already paid under any provision of this Act, the assessee shall be liable to pay such tax before furnishing the return and the return shall be accompanied by proof of payment of such tax. (3) If any assessee fails to pay the tax or any part thereof in accordance with the provisions of sub-section (1), the Income-tax Officer may direct that a sum equal to two per cent of such tax or part thereof, as the case may be, shall be recovered from him by way of penalty for every month during which the default continues :" Now we find in the new provisions certain marked changes. In the first place, it is noticed that whereas in the provisions considered by the High Court there was a liability on the assessee to pay tax as per the return within 30 days of furnishing a return, in the amended provision the assessee has a liability to pay tax on the basis of return before furnishing such return. The second important change, according to us, is that whereas in sub-section (3) before amendment it was provided that an assessee in default of payment as stated therein shall unless regular assessment under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... substituted provisions of the same and also adverted to the changes brought about and the timing of the amendment only to emphasise the point that the amendment to the provisions of section 140A(3) noticed above does not merely effect some verbal or superficial changes, but there is a marked difference in the substance of the provisions and, therefore, it is not possible to hold that the substituted provisions of section 140A(3) remained in substance and effect the same as the earlier provisions considered by the High Court and struck down as unconstitutional. To require, therefore, that the substituted provisions of section 140A(3) should also be held to be hit by the decision of the Madras High Court, in A.M. Sali Maricar's case and, therefore, should be ignored as non est would amount to requiring us to hold by applying the principles stated in the decision of the High Court to the new provisions and then declare them to be ultra vires or unconstitutional, which power the Tribunal does not possess being a creature of the statute as held by the Supreme Court in K.S. Venkataraman Co. (P.) Ltd. v. State of Madras [1966] 60 ITR 112. In other words, the conclusion we reach on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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