9911796707
TMI Blog1994 (1) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... ence relates to the assessment years 1979-80, 1980-81 and 1981-82. For each of these three years, the assessee-firm filed its returns of total income beyond the statutory period prescribed in law. For such delay in filing the tax returns, the Assessing Officer levied penalties of Rs. 4,735, Rs. 3,857 and Rs. 329 for the said three years, respectively. The levy of such penalties was upheld by the Appellate Assistant Commissioner. In the course of second appeal before the Tribunal, it was contended on behalf of the assessee that the entire tax as assessed upon the assessee, a registered firm, in respect of each of the said three years was duly paid by way of advance tax. In fact, there was excess payment by way of advance tax in each of the said three years and on regular assessment, the assessee became entitled to receive refunds of advance tax paid earlier. The Tribunal, following the decision of the Supreme Court in Ganesh Dass Sreeram v. ITO [1988] 169 ITR 221, held that no penalty was leviable for late filing of the returns under section 271(1)(a) of the said Act if it was found that in each of the said three years, the assessee had paid by way of advance tax amounts equal to an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... continued. Explanation.-In this case, 'assessed tax' means tax as reduced by the sum, if any, deducted at source under Chapter XVII-B or paid in advance under Chapter XVII-C. " A plain reading of the aforesaid section makes it quite clear that the penalty for delayed filing of return, which can be levied under the aforesaid provision is a sum equal to two per cent. of the assessed tax for every month during which the default continued. The expression "assessed tax", according to the Explanation, means "tax as reduced by the sum, if any, deducted at source under Chapter XVII-B or paid in advance under Chapter XVII-C". In other words, if it is found that the tax deducted at source or paid by way of advance tax exceeds the tax determined on regular assessment, no tax remains due. In other words, the assessed tax becomes zero within the meaning of this Explanation. Since the penalty has to be calculated at a sum equal to two per cent. of the assessed tax for every month during which the default continued, the result is that no penalty can at all be levied even when the provision of this section is held to be attracted to a given case like the present one. The amount of penalty wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return where the tax deducted at source or paid in advance is equal to or exceeds the assessed tax in the case of a registered firm. Reference was made on behalf of the Revenue to the decision of the Full Bench of the Patna High Court in Jamunadas Mannalal v. CIT [1985] 152 ITR 261 which has taken a view that the mandate of section 271(2) is operative irrespective of the fact that the assessee did not have any assessed tax to pay after adjustment of advance tax paid and the tax deduction at source. We, however, fail to persuade ourselves to agree with the view of the Full Bench of the Patna High Court. The decision of the Andhra Pradesh High Court is based on the correct interpretation because the other view as canvassed by the Department results in a certain absurdity and unjust result. In this connection it may be mentioned that the Central Board of Direct Taxes in a circular instructed the Assessing Officer that section 271(1)(a) should not be invoked in the case of a registered firm unless its income as a registered firm exceeds the maximum amount not chargeable to tax by Rs. 1,500. At that point of time when the circular was issued the non-taxable limit for a registered fir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not have asked the officer not to invoke sub-section (2) unless the exempt income of the registered firm is exceeded by Rs. 1,500 by the assessed total income. It is true to say that equitable considerations have no place in the interpretation of the tax laws but this is not an absolute rule and cannot be pushed to the extreme of saying that the interpretation can be unreasonable and unjust even when a more rational interpretation is contrastingly equitable and just. The Supreme Court in Jodha Mal Kuthiala's case [1971] 82 ITR 570 has observed at page 575 that it is true that equitable considerations are irrelevant in the interpretation of tax laws. There is no intendment to be considered but interpretation has, however, to be reasonable and just. No law can ever let itself be used as an instrument of oppression or discrimination. We refer in this connection to a decision of the Madras High Court in T. R. Rajakumari v. ITO [1972] 83 ITR 189. It has held that there is no equity or intendment in tax law yet the same principle does not or cannot extend to a penal proceedings. There is one more angle to the whole issue vindicating the view taken by the Andhra Pradesh High Court and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment year 1963-64 late by over 15 months. On regular assessment, a tax demand of Rs. 5,657.44 was determined to be payable by the assessee-firm in that case. This sum of Rs. 5,657.44 had been paid by the assessee-firm after the completion of regular assessment on September 20, 1967, while the order for the imposition of penalty was passed subsequent thereto on June 29, 1969. The contention of the assessee before this court was that since on the date of imposition of penalty, no assessed tax was remaining due and/or payable by the assessee, a registered firm, no penalty could be levied for delayed filing of the return. The Income-tax Officer, however, had levied a penalty of Rs. 15,335 being two per cent. of the tax for every month during which the default continued. This penalty had been calculated on the basis of tax due from an unregistered firm as envisaged by section 271(2) of the said Act. This court held that the expression "for every month during which the default had continued" would not govern the period for which the tax had remained unpaid. But in determining the period during which the default had continued, the period as contemplated by section 271(1)(a) would be appl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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