9911796707
TMI Blog1973 (7) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... nd referred the following questions of law: " Whether, on the facts and in the circumstances of the case, levy of penalty under section 271(1)(a) is valid in law ? " With the consent of the learned counsel for the assessee and the department, we recast the question as follows: " Whether, on the facts and in the circumstances of the case, the levy of penalty under section 271(1)(a) is justified in law ? " The assessee is a registered firm and the relevant accounting period was the financial year ended on March 31, 1966. The return of income under section 139(2) became due on October 7, 1966. The assessee did not file its return by the said date nor did it apply for extension of time until December 17, 1966. The request for extension ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was not sufficient to attract the penalty. We have been taken through the order of the Income-tax Officer as well as the orders of the two appellate authorities. Section 271(1)(a) of the Act confers jurisdiction on the Income-tax Officer or the Appellate Assistant Commissioner in the course of any proceedings under the Act to direct any assessee to pay by way of penalty the sums calculated in the manner provided under the said sub-section. The condition precedent to be satisfied for the Income-tax Officer to levy penalty is that the assessee has without reasonable cause failed to furnish the return or has without reasonable cause failed to furnish it within the time allowed by law. Section 271(1)(a) is in pari materia with section 18(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee acted deliberately in violation of law can be drawn." In Hindustan Steel Ltd. case, the Supreme Court has stated that " the liability to pay penalty does not arise merely upon proof of default ; that an order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceeding, and penalty will not ordinarily be imposed unless the party obliged, either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation." There is no finding by any of the authorities to the effect that the assessee in the instant case acted deliberately in defiance of law or was guilty of conduct, contumacious or dishonest, or acted in co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deciding the question as to under what circumstances the liability to pay penalty arises. They appear to have proceeded on an erroneous view that if there is default and the assessee's explanation is not accepted, penalty ought to be levied. The erroneous view, in our opinion, has entirely vitiated the decision of the authorities below. As stated earlier there is no material to hold that the assessee had deliberately failed to submit its return within the time allowed by law or that its conduct was contumacious or dishonest. On the facts and circumstances of the case, the levy of penalty under section 271(1)(a), in our opinion, was not justified in law. Accordingly, we answer the question as recast in the negative and in favour of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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