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TMI Blog1982 (6) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... her assessment year the penalty of Rs. 27,360 was imposed. Calculation in both the cases was at the rate of 2% per month for the period of default. On appeal being preferred before the AAC, the penalty orders were set aside. On further appeal by the Department, the Tribunal upheld the order of the AAC. On a prayer for reference to this court the following question has been referred: "Whether, on the facts and in the circumstances of the case, the assessee being a registered firm was liable to pay penalty under s. 27l(1)(a) read with s. 271(2) even though the assessed tax within the meaning of Explanation to section 271 was a negative figure ? " It may be stated that the assessed tax on the firm, treating it as registered firm, came to R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In such an eventuality it is apparent that the " notional assessed tax " would be more, may be, much more and even if reduction is made for the advance tax paid under Chap. XVII-C, the firm would become liable to penalty. This contention was, however, not accepted in the aforesaid case because sub-s. (2) operates only when person is " liable to penalty ". It was held in Maskara Tea Estate [1981] 130 ITR 955 (Gauhati) by this court that the liability to penalty has to be determined with reference to what has been stated in sub-s. (1), and that too not by confining one's attention to cl. (a) but also by adverting to cl. (i)(b) read with its Explanation. If it is so done, and if the advance tax is more than the tax determined as payable, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is opinion with all that has been noted in that decision. Learned standing counsel could not bring anything to our notice to take a different view in the matter. Another reasoning would also lead to the same conclusion. The idea behind the imposition of penalty is also to take care of the Revenue., apart from penalising the wrong-doer. Now, if a person had paid in advance the full amount of the tax payable, there would be no logic in penalising him in so far as the interest of the Revenue in the collection of tax is concerned. Because of all the above, we are of the opinion, that the present was not a case on its facts which attracted the mischief of s. 271(2) of the Act. Being of this view, we answer the question referred to us in the ne ..... X X X X Extracts X X X X X X X X Extracts X X X X
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