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TMI Blog1984 (3) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... r the assessment years 1964-65 and 1965-66 ? " The assessee had filed returns of his income for the assessment years 1964-65 and 1965-66 on March 22, 1966. All the assessments were completed on March 26, 1966. As the returns were not filed within the time prescribed under s. 139(1), the ITO initiated action under s. 271(1)(a) for both the assessment years and levied penalties of Rs. 76,198 and Rs. 24,264 for the two years. On appeal by the assessee, the AAC set aside the orders of the ITO as the AAC found that the assessee had already paid to the Department the sums much in excess of the taxes for these two years long before the filing of the return and, secondly, the assessee had reasonable cause for not filing the returns within time. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rised representative submitted that the assessee had no objection for the levy of the penalty as per the settlement. Some time in 1962, a raid was carried out by the Forward Markets Commission on the appellant's business premises as also at the residence when all the records and cash of the appellant were taken over. These proceedings were initiated some time in 1964, and a consent order was passed on October 10, 1964, by the Addl. CPM, Calcutta, and the whole matter and the seized books were made over to the Income-tax Department. Therefore, the Income-tax Department got a sum of Rs. 5,69,000 in their possession. Thereafter, there was a settlement between the assessee and the Department that all the dues, regarding taxes and penalties for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for every month during which the default continued, but not exceeding in the aggregate fifty per cent. of the tax ; (ii) in the cases referred to in clause (b), in addition to any tax payable by him, a sum which shall not be less than ten per cent. but which shall not exceed fifty per cent. of the amount of the tax, if any, which would have been avoided if the income returned by such person had been accepted as the correct income ....... (iii) in the cases referred to in clause (c), in addition to any tax payable by him, a sum which shall not be less than twenty per cent. but which shall not exceed one and a half times the amount of the tax, if any, which would have been avoided if the income as returned by such person had been accep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x assessed". The tax payable is the amount for which a demand notice is issued under s. 156 of the I.T. Act, 1961. In determining the tax payable, the tax already paid has to be deducted. Hence, the expression " the amount of tax, if any, payable by him " in the earlier part of s. 271(1)(a)(i) refers to the tax payable under a notice of demand. The words " the tax " in the latter part of the provision can only refer to " the tax, if any, payable " by the assessee mentioned in the earlier part of s. 271(1)(a)(i). The Supreme Court further held that even if the court finds that the language of a taxing provision is ambiguous or capable of more meanings than one, then the court has to adopt that interpretation which favours the assessee, more ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,000 were seized and, later on, the amount was kept at the disposal of the Income-tax Department. Therefore, the assessee could not maintain any books of account. There was no mala fide intention on the part of the assessee to delay the filing of the return to avoid payment of tax, and the matter was under negotiation with the Department for the assessment years 1961-62 to 1965-66, and it was agreed between the parties that the tax may be deducted or adjusted from the amount of Rs. 5,69,000 already lying with the Department along with the penalties for filing the late return, if any, if they were found payable by the assessee. In CIT v. Rawat Singh and Sons [1979] 120 ITR 65, this court has held that for imposition of penalty under s. 271 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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