9911796707
TMI Blog1995 (2) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... to interfere. Thereupon, the assessee filed Writ Petition No. 283 of 1994 seeking to challenge the imposition of penalty. It was brought to the notice of the learned single judge that there is a conflict of opinion amongst the various High Courts. The learned judge felt bound by the decisions of this court which are against the assessee and, accordingly, dismissed the writ petition. Hence, this appeal. Section 271 of the Act deals with failure to furnish returns, comply with notices, concealment of income, etc. Sub-section (1) has three clauses (a), (b) and (c). Clause (a) deals with failure to file returns or filing belated returns, clause (b) deals with failure to comply with the notice under certain provisions or directions under some ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sable under sub-section (1) shall be the same amount as would be imposable on that firm if that firm were an unregistered firm. " There is no dispute that the appellant filed returns belatedly. If it was without reasonable cause, he would thereby incur liability for penalty. Penalty is to be quantified in the instant case under clause (i)(b) at a sum equal to two per cent. of the "assessed tax" for every month during which the default continues. "Assessed tax" for this purpose is tax as reduced by the sum, if any, deducted at source under Chapter XVIIB or Chapter XVIIC. There is no dispute that the appellant had paid advance tax for the periods in question under Chapter XVIIC and the advance tax so paid was more than the tax ultimately as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the Assessing Officer and the appellate and revisional authority looked at the matter. Learned counsel for the appellant contends that this is not the correct way of understanding and interpreting the statutory provisions, that sub-section (1) should be first invoked and applied and only if there is some amount of assessed tax found, can sub-section (2) be invoked and in this case, since the appellant is a registered firm, and the advance tax paid is more than the tax payable as a registered firm, there was no "assessed tax" and no penalty was leviable and in such a case sub-section (2) would not apply. This court has consistently taken the view against the view propounded by the appellant. (see : Delux Publishing Co. v. Addl. CIT [19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ochhavlal and Co. [1976] 105 ITR 518, where the assessee, a registered firm, was not liable to pay tax since the assessable income was less than the exemption limits, but penalty was levied for belated filing of the return and that was sustained by the High Court. The question which arises for consideration is whether the view taken by this court in the earlier decisions requires reconsideration. Having carefully considered the various decisions, we are of the opinion that the learned single judge was justified in following the earlier view of this court. Learned counsel for the appellant placed reliance on the decision of the Supreme Court in Ganesh Dass Sreeram v. ITO [1988] 169 ITR 221. That is a case not on levy of penalty under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of the decisions of this court in Chandra Sekhar's case [1985] 151 ITR 433 and in the case of Central Provinces Manganese Ore Co. Ltd. [1986] 160 ITR 961, we hold that the charging of interest did not become transformed into penalty. " Since interest was leviable by way of compensation, the assessee had paid full advance tax which covered the tax due, and the State did not suffer any loss, obviously interest could not be charged. This principle will not apply to imposition of penalty. Learned counsel relied on the decision in CIT v. Deepak Trading Co. [1994] 208 ITR 304 (Cal), which refers to a circular issued by the Central Board of Direct Taxes at page 309. The Board issued a circular instructing the Assessing Officer that sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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