9911796707
TMI Blog1976 (6) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... ircumstances of the case, the Tribunal was justified in law in upholding the order of the Appellate Assistant Commissioner cancelling the penalty orders of the Income-tax Officer under section 271(1)(a) of the Income-tax Act, 1961, relating to the assessment years 1963-64 and 1964-65, on the ground that the penalty orders were illegal and not according to law ?" The facts of the case may be briefly stated as follows : In the assessment year 1963-64, the Income-tax Officer found that the assessee's accounting year ended on September 30, 1962, and, therefore, it was required to submit the return of income on or before June 30, 1963. But the assessee submitted the return on October 3, 1964, and thus there was a delay of 15 months in the sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal. On the reasonings given in its common order, the Tribunal upheld the order of the Appellate Assistant Commissioner setting aside the impugned orders of penalty passed by the Income-tax Officer. Thereafter, on the application of the Commissioner of Income-tax under section 256(1) of the Act, the above common question of law has been referred. From the order of the Appellate Assistant Commissioner the Tribunal found as correct that for the assessment year 1963-64, the assessee was assessed on a total income of Rs. 2,89,620. The tax calculated on the income of Rs. 2,89,620 in the status of an unregistered firm would be Rs. 2,19,035 and at the rate of 2 per cent. per month on this amount, the penalty assessable was Rs. 4,380 and the del ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e order of penalty imposed by the Income-tax Officer and in that view the Tribunal upheld the order of the Appellate Assistant Commissioner. For the assessment year 1964-65, the Tribunal found that the assessee was assessed on a total income of Rs. 2,81,110. Relying on the reasonings of the Appellate Assistant Commissioner, the Tribunal observed that the tax on the total income of Rs. 2,81,110 in the status of an unregistered firm came to Rs. 2,03,405 and the penalty at the rate of 2 per cent. of this amount came to Rs. 4,068 per month. The delay in submission of the return was for a period of 23 months and, therefore, the penalty imposable in the assessment year 1964-65 was Rs. 93,564. But the Income-tax Officer imposed a penalty of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onable cause failed to furnish the return of total income which he was required to furnish under sub-section (1) of section 139 or by notice given under sub-section (2) of section 139 or section 148 or has without reasonable cause 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), in addition to the amount of the tax, if any, payable by him, a sum equal to two per cent. of the tax for every month during which the default continued, but not exceeding in the aggregate fifty per cent. of the tax ;...... Explanation.--...... (2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 271 while determining the quantum of penalty between the minimum and maximum limits prescribed. The statutory minimum and maximum limits of penalty imposable under section 271 have to be observed by any authority imposing the penalty. In the instant case, the penalty was imposed contrary to the provisions of sub-section (2) of sec-tion 271. That being so, the order of the Income-tax Officer cannot be said to be in accordance with law and, therefore, it is not sustainable in law. The penalty imposable in both the assessment years was much higher than the penalty imposed by the Income-tax Officer. It is not disputed before us that the Tribunal has no right to enhance the penalty. The question of law referred to us is also not to the eff ..... X X X X Extracts X X X X X X X X Extracts X X X X
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