C.K. George vs Agricultural Income Tax Officer and Another

T.L. Viswanatha Iyer, J.—The challenge is to the imposition of penalty u/s 17A(3) of the Agricultural Income Tax Act, 1950, in respect of the assessment years 1980-81 and 1981-82. The returns for these two years were due to be filed on June 1, 1980, and June 1, 1981, along with admitted tax but they were actually filed only on March 26, 1983, and September 20, 1983, respectively. The petitioner-assesses had paid an amount of Rs. 20,000 towards the tax due for the year 1980-81 before the return was filed on March 26, 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., June 1, 1980, and June 1, 1981, and that Section 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 exhibits P-5 and P-6. The petitioner challenged the order in revision which was dismissed by the Deputy Commissioner (Appeals), Agricultural Income Tax and Sales Tax, by exhibit 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 O.P. No. 3506 of 1990 in this court. One of us disposed of that writ petition by the judgment dated February 9, 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 W. A. No. 390 of 1991, (Inspecting Asst. Commr. of Agrl. I. T. and S.T. v. Velimalai Rubber Co. Ltd. [1996] 218 ITR 257) and the Division Bench dismissed the appeal on October 11, 1991, 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 u/s 17A(3) were not the proper remedy but proceedings u/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 June 1, 1980, and June 1, 1981, respectively, u/s 17A(3) are not sustain-able. 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., March 26, 1983, and September 20, 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 exhibits P-5, P-G and P-7 are, therefore, set aside and the matter remitted back to the first respondent-Agricultural Income Tax Officer 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.