C. K. GEORGE vs AGRICULTURAL INCOME TAX OFFICER and Another

T. L. VISWANATHA IYER, J. :

The challenge is to the imposition of penalty under s. 17A(3) of the Agrl. IT Act, 1950, in respect of the asst. yrs. 1980-81 and 1981-82. The returns for these two years were due to be filed on 1st June, 1980, and 1st June, 1981, along with admitted tax but they were actually filed only on 26th March, 1983, and 20th September, 1983, respectively. The petitioner-assessee had paid an amount of Rs. 20,000 towards the tax due for the year 1980-81 before the return was filed on 26th March, 1993, and an amount of about Rs. 5,000 remained as balance of agricultural Income Tax and surcharge for that year on the date when the return was filed. That was paid only later. So far as the year 1981-82 is concerned, no portion of the tax or surcharge due was paid on the date when the return was filed and the amount was paid only subsequently. Taking the view that the assessee had committed default in payment of the tax due on the date when the returns were to be filed, viz., 1st June, 1980, and 1st June, 1981, and that s. 17A(3) would apply in such circumstances, the assessing authority imposed a penalty of Rs. 14,480 for the year 1980-81 and Rs. 20,610 for the year 1981-82. The penalty was imposed by the orders Exts. P-5 and P-6. The petitioner challenged the order in revision which was dismissed by the y. CIT (A.), Agricultural IT and ST, by Ext. P-7 order. Exhibits P-5, P-6 and P-7 are in challenge in these proceedings.

Similar orders of penalty had been made on the petitioner in the subsequent years, viz., 1982-83, 1983-84 and 1984-85, which were challenged by filing OP No. 3506 of 1990 in this Court. One of us disposed of that writ petition by the judgment dt. 9th February, 1994, following the decisions in Samogiri Pvt. Ltd. Vs. Agricultural Income Tax Officer and Another, and Velimalai Rubber Co. Ltd. Vs. Inspecting Assistant Commissioner of Agricultural Income Tax and Sales Tax and Another, .

It was submitted before us that the decision in the latter case was taken up in appeal in WA No. 390 of 1991, and the Division Bench dismissed the appeal on 11th October, 1991 [reported as IAC. of Agrl. IT & ST vs. Velimalai Rubber Co. Ltd. (1998) 146 CTR (Ker) 531], in limine. It was held in the aforesaid decision that for default in submission of returns and non-payment of tax along with those returns on the due dates of filing of the returns, proceedings under s. 17A(3) were not the proper remedy but proceedings under s. 20. In view of the aforesaid decisions one of which stands confirmed by a Division Bench, the impugned orders imposing penalty on the petitioner from 1st June, 1980, and 1st June, 1981, respectively, under s. 17A(3) are not sustainable. At the same time the petitioner is liable for penalty for the period subsequent to the date of filing of the returns for the two years, viz., 26th March, 1983, and 20th September, 1983, in respect of the balance amount due from him as on these dates till the date of payment of the amount due.

The orders Exts. P-5, P-6 and P-7 are, therefore, set aside and the matter remitted back to the first respondent-Agrl. ITO to impose penalty on the petitioner for non-payment of the amounts due on the date of filing of the respective returns for the two years. The first respondent shall pass orders after notice to and hearing the petitioner in the matter.

The writ petition is allowed as above. There will be no order as to costs.