9911796707
TMI Blog1992 (4) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... y of penalty under section 271(1)(a) of the Income-tax Act, 1961 ? " The assessee is a registered firm and was assessed to tax in that status. it was required to file its return of income for the assessment year 1976-77 on or before July 31, 1976. The return was, however, filed after a delay of seven completed months from the due date. The Income-tax Officer initiated penalty proceedings under section 271(1)(a) of the Act. After taking into consideration the explanation furnished by the assessee, the Income-tax Officer held that the assessee had failed to make out reasonable cause for the delay in furnishing its return. The Income-tax Officer, therefore, subjected the assessee to a penalty of Rs. 8,120 being the amount, at the rate of 2 pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause failed to furnish it within the time allowed and in the manner required by sub-section (1) of section 139 or by such notice, as the case may be, or . . . he may direct that such person shall pay by way of penalty,- (i) in the cases referred to in clause (a), (a) in the case of a person referred to in sub-section (4A) of section 139, where the total income in respect of which he is assessable as a representative assessee does not exceed the maximum amount which is not chargeable to income-tax, a sum not exceeding one per cent. of the total income computed under this Act without giving effect to the provisions of sections 11 and 12, for each year or part thereof during which the default continued; (b) in any other case, in addition to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... planation appended to the above provisions which, in turn, provide that assessed tax means tax as reduced by the sum, if any, deducted at source or paid as advance tax. Section 271(2) provides for a contingency when the person committing the default under clause (a) of section 271 happens to be a registered firm and it is exposed to liability of paying penalty because of such default, The said provision introduces a legal fiction for the purpose of quantification of penalty in the case of a registered firm. It says that where a person liable to penalty is a registered firm or an unregistered firm which has been assessed under clause (b) of section 183, then, notwithstanding anything contained in the other provisions of the Act, the penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the sum, if any, deducted at source or paid as advance tax. However, if the defaulter is a registered firm, for the purpose of imposition of penalty, the firm is to be treated as an unregistered firm and, so treated, the " assessed tax " must be calculated on the basis that it was an unregistered firm. Now, adverting to the facts of the present case, admittedly, there was a delay of seven months in filing the return of income. The cause shown by the assessee was not found acceptable. From the order of the Commissioner of Income-tax (Appeals), it is apparent that there was an amount of assessed tax payable as a registered firm at the time when the assessment took place and at the stage when the notice of demand was issued after adjustment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case on the basis of which the contention raised before us could be determined. We may also notice that no such plea was raised before the Income-tax Appellate Tribunal. The only question that had been raised before the Income-tax Appellate Tribunal was that the advance tax paid by the assessee should have been deducted from the tax computed in the status of an unregistered firm. The Tribunal accepted that plea and directed the Income-tax Officer to recompute the penalty after deducting the advance tax paid as claimed by the assessee. The further question that the quantum of penalty was excessive or not does not arise from the order of the Income-tax Appellate Tribunal. No such question was canvassed before the Incometax Appellate Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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