Commissioner of Income Tax vs Gupta Sand Stone Co.

The Income Tax Appellate Tribunal has referred the following question of law arising out of its order dated August 2, 1982, in respect of the assessment year 1977-78 :

"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in deleting the penalty of Rs. 4,880 levied u/s 271(1)(a) of the Income Tax Act, 1961 ?"

The brief facts of the case are that the Income Tax Officer, Sawaimadhopur, issued a notice to the assessee u/s 274 read with Section 271 as to why penalty be not imposed for not filing the return of income. Since no reply was filed, a penalty of Rs. 4,850 on the basis of delay in filing the return by 33 months was levied.

In appeal, before the Appellate Assistant Commissioner, it was submitted that there was amalgamation of the assessee-firm with that of Messrs. Jagdish Prasad Contractor and the finalisation of the accounts could not be completed in time. The explanation submitted by the assessee was not found satisfactory and the appeal was rejected.

In the second appeal preferred to the Income Tax Appellate Tribunal it was contended that since the amount of tax was paid by way of advance tax or deduction at source, no penalty was leviable.

Reliance was placed on the decision of the Gauhati High Court in the case of Commissioner of Income Tax, Etc. Vs. Maskara Tea Estate,

We have considered the matter. The law is well-settled on the point even by this court in the case of Commissioner of Income Tax Vs. Builders Engineers Co., and in view of the fact that the assessee had paid the entire amount of tax, the delay was only in submitting the return, the tax was paid at source or was paid as advance tax, the Income Tax Appellate Tribunal was justified in coming to the conclusion that the penalty of Rs. 4,880 levied u/s 271(1)(a) of the Income Tax Act, 1961, is not leviable.

Accordingly, the reference is answered in favour of the assessee and against the Revenue. No orders as to costs.