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TMI Blog1986 (5) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... worked out by the ITO as 10 months. 3. In reply to the show cause notice the same excuse was given as in the past years when there were similar defaults. It was contended that the accountant of the firm is old and sick and therefore the return could not be filed in time. This contention as mentioned above was rejected in the past also. It appears no further contentions were made before the ITO. 4. Before the AAC for the first time the point was taken that the assessee had paid advance tax which is more than the amount found to be due on regular assessment. Consequently, the ratio of CIT vs. Maskara Tea Estate (1981) 21 CTR (Gau) 47 : (1981) 130 ITR 955 (Gau) would apply. This contention was rejected by the AAC for the reasons given by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the assessee pays more advance tax than the regular demand, by delaying the return, the assessee is merely causing delay of his own refund. Shri Platil then referred to (1981) 130 ITR 955 (Cal). He further referred to ITO vs. Abdul Majid (1985) 23 TTJ (Del) 450 (TM) : (1985) 113 ITD 762 (Del) (TM). In this case there was difference of opinion between the Judicial and Accountant Member and the President as a Third Member considered the various aspects of the case and held that for the purpose of deciding whether the condition is satisfied or not it may not be proper to apply the provisions of s. 271(2) itself. The provisions of s. 271(1)(a) alongwith Explanation thereto contemplates imposition of penalty equal to 2 per cent of assessed tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee's representative looses its force in the light of the Bombay High Court judgment in CIT vs. Janata Trading Co. (1983) 37 CTR (Bom) 203 : (1984) 150 ITR 676 (Bom) wherein their Lordships have already held that the penalty imposable on a registered firm is to be based on the amount of tax assessed on it as on an unregistered firm and not the net amount of tax, if any, payable as registered firm. Shri Walvekar contended that this decision was not available to the Tribunal when it decided the case mentioned at (1915) 13 ITD 762 (Del). Shri Walvekar next contended that P. Venkata Krishnaya Naidu Sons. vs. CIT (1985) 49 CTR (AP) 278 : (1984) 150 ITR 545 (AP) whcih have followed (1981) 130 ITR 955 (Cal) and CIT vs. Ganeshdas Shreram Firm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stly, Shri Walvekar pointed out that to resolve the conflicting decisions of the High Court a Full Bench was constituted in the Patna High Court whose decision is clear in Jamunadas Mannalal vs. CIT (1985) 45 CTR (Pat) 97 (FB) : (1985) 152 ITR 261 (Pat). The fundamental rule of construction of all statutes is the same namely to arrive at the real meaning. According to this judgment there are only two aspects viz. whether there is a reasonable cause for the delay in the return and secondly if there is no reasonable cause the quantification of penalty is to be levied in respect of period of default. If the assessee is a registered firm the above legal fiction of 271(2) does not permit giving to the assessee benefit of being a registered firm. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee should be accepted. I am afraid I cannot subscribe to the proposition that a judge faced with a conflict of precedent should abdicate his judgment and accept the view which is favourable to the assessee. It is only where a Judge finds that two equally reasonable views are possible and he unable to decide which is the better view, that he may adopt the rule of interpretation that the view favourable to the assessee might be accepted." 6. Shri Walvekar submitted that in view of this position, we have to apply this principle to be adopted in case of conflicting precedent and not the one applicable in case of construction of statutes for the first time. Shri Walvekar also referred to (1983) 6 ITD 474 (AP). He also submitted that the v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the return is filed when the limitation period is about to expire. In the former case ITO gets time of two years from the end of the assessment years whereas in the latter case ITO gets only one year after filing the return. The test of "assessed tax" cannot therefore be applied in isolation from the various other provisions of the Income Tax Act. If ss. 271(1)(a) and 271(2) are read together it would be clear that one has to see first the period of default without reasonable cause. Once that period is determined one has merely to quantify the penalty in terms of formula prescribed in the above sections. This consequence follows irrespective of the actual liability that may arise. In our opinion, the ratio of (1984) 150 ITR 676 (Bom) canno ..... X X X X Extracts X X X X X X X X Extracts X X X X
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