TMI Blog1976 (8) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner calling upon him to pay Rs. 3,050 as advance tax for the assessment year 1972-73. The petitioner paid the advance tax demanded by annexure 1. Having failed to submit to the Income-tax Officer an estimate of the current income and the advance tax payable by him on the current income calculated in the manner laid down in section 209 of the Act the petitioner filed the returns under section 140A of the Act and paid along with it all that he was liable to pay upon his total income during the assessment year 1972-73. The petitioner showed in his return a total income of Rs. 80,317. The amount of tax computed on the current income of the petitioner having exceeded the amount of advance tax demanded from him by more than 33 1/3% and the petitioner not having filed the estimate as required by section 212(3A), the Income-tax Officer, Ranchi, initiated a proceeding under section 273(c). A notice with enclosure was served upon the petitioner. After hearing the petitioner the assessing officer passed the impugned order contained in annexure 2. The submission on behalf of the petitioner having failed before the Income-tax Officer, Ward A, Ranchi Circle, Ranchi, the petitioner appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ention urged on behalf of the petitioner appears to be that there was no means rea on the part of the petitioner in not having filed the return of estimated income by the 15th of March, 1972, as the entire tax on the basis of the return was paid by the assessee on the 31st of July, 1972. The Income-tax Officer rejected the submission holding that in terms of the Income-tax Act the existence of mens rea was not a necessary element for imposing the penalty under section 273(c) of the Act. The appellate authority, while rejecting the contention of the petitioner, observed that the cause shown by the petitioner for the default was not a reasonable cause as the income of the assessee, according to his books and as assessed, was Rs. 68,022 which was not just below the margin of limit, not to speak of the assessed income. According to the Appellate Assistant Commissioner, the default or the cause for the default was within the personal knowledge of the appellant (petitioner) and unless he discharged the initial burden of proving his case satisfactorily, the assessee was bound to be visited with a penalty. With those observations the appeal was dismissed. The Income-tax Commissioner in rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he manner laid down in section 209, and shall pay such amount of advance tax as accords with his estimate on such of the dates applicable in his case under section 211 as have not expired, by instalments which may be revised according to sub-section (2): Provided that in a case where the Commissioner is satisfied that, having regard to the nature of the business carried on by the assessee and the date of expiry of the previous year in respect of such business, it will be difficult for the assessee to furnish the estimate required to be furnished by him in accordance with the provisions of this sub-section before the date on which the last instalment of advance tax is due in his case, he may, if the assessee pays the advance tax demanded from him under section 210 before such date, extend the date for furnishing such estimate up to a period of thirty days immediately, following the last date of the previous year in respect of that business, and where the date is so extended, the assessee shall pay, on or before the date as so extended, the amount by which the amount of advance tax already paid by him falls short of the advance tax payable in accordance with his estimate." It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the proviso to sub-section (3A) of section 212 of the Act, can it be said by any stretch of imagination that there had been no wilful default on the part of the petitioner in not submitting the estimate of income and the tax. In my view, such a view would be contrary to the purpose of enacting sub-section (3A) and the proviso thereto. The law in relation to filing of estimate of advance tax may be harsh, but that is hardly of any consequence. The law provided it and it had to be complied with. The law clothed the Commissioner with authority to minimise the rigour of the law wherever it was justified, but the petitioner chose not to comply with the requirement of sub-section (3A) as well as the opportunity to get the date extended. In my view, therefore, there was wilful default on the part of the petitioner in not filing the estimate of income and advance-tax. It was contended on behalf of the petitioner that the petitioner could not file estimate within the requisite time, but there was no mens rea on its part. Section 273(c) not having ruled out mens rea as a pre-condition for levy of penalty, the orders in question were illegal. Penal proceedings being in the nature of quasi-c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 76 ITR 696 (SC) that in a proceeding under section 28 of the 1922 Act (which is equivalent to section 271(1)(a) of the 1961 Act) being of a penal nature the burden was on the department to prove that a particular amount was a revenue receipt. It would be perfectly legitimate to say, to quote the words of the Supreme Court, that the mere fact that explanation of the assessee is false does not necessarily give rise to the inference that the disputed amount represents his income. Learned counsel for the petitioner also placed reliance upon Additional Commissioner of Income-tax v. Narayanadas Ramkishan [1975] 100 ITR 18 (AP), Shakuntala Mehra v. Commissioner of Wealth-tax [1976] 102 ITR 301 (Delhi) and V. L. Dutt v. Commissioner of Income-tax [1976] 103 ITR 634 (Mad) for the proposition that mere failure to file return of income was not sufficient for imposing penalty on the assessee. On the other hand, learned standing counsel for the income-tax department placed reliance upon Commissioner of Income-tax v. Gujarat Travancore Agency [1976] 103 ITR 149 (Ker) [FB] which laid down that proof of mens rea was not necessary for imposition of penalty under section 271(1)(a) of the Income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epartment has shown prima facie that there was no reasonable cause for not furnishing the estimate within the time allowed by the statute, the onus must shift to the assessee. Applying the test laid down above, I am of the view that in the instant case, the department had shown prima facie want of reasonable cause in the petitioner in not having filed the estimate of advance tax required to be done by sub-section (3A) of section 212 of the Act. The order of the Income-tax Officer as usual is sketchy, but the Appellate Assistant Commissioner held that there was no reasonable cause from the fact that the income of the assessee was Rs. 68,022 which was not just below the margin limit. The Commissioner of Income-tax while considering the submission urged on behalf of the petitioner found that the inability of the petitioner to determine the tax was untenable. The petitioner having followed the mercantile system of accounting, it was incredible, according to the Commissioner of Income-tax, that the assessee could not get an inkling before the 15th of March about the rise in income. After considering the materials before him, the Commissioner came to the conclusion that there was compl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of these cases is of any assistance to the petitioner as I shall presently show. In N.N. Subramania lyer's case [1974] 97 ITR 228 (Ker) penalty had been imposed upon the petitioner under the Wealth-tax Act for not having included certain agricultural assets in the return. The penalty notice in that case was held to be illegal, as several grounds for imposing penalty under section 18(1) of the Wealth-tax Act had been printed. None of those several grounds had been struck off and thus there was no indication in the notice in regard to the contravention for which the petitioner had been called upon to show cause why penalty should not be imposed. The situation in the present case is entirely different. The notice and the enclosure clearly indicated that the petitioner was being called upon to deposit advance tax on certain basis in terms of section 210 of the Act. It cannot, therefore, be held that the petitioner was kept in the dark or that he was misled in complying with the provisions of the statute or the directions in the notice. In that view of the matter, N. N. Subramania Iyer's case [1974] 97 ITR 228 (Ker) is of no avail to the petitioner. In B. K. Gooyee's case [1966] 62 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed before the income-tax authority. Learned counsel for the petitioner showed to us the original notice served upon the petitioner. Apart from the enclosure, the notice shown to us was only in one page. It is difficult to say whether there was only one cyclostyled page or whether there were two cyclostyled pages. If the petitioner had urged this point before the appellate or revisional anthority, the grievance of the petitioner could have been considered. I am, therefore, not inclined to permit the petitioner to urge this question of fact for the first time before this court. If the notice in Form 28 contained two pages, it is difficult to say whether the second page contained the signature of the Income-tax Officer or not. In that view of the matter, the submission urged on behalf of the petitioner in regard to the invalidity of the notice must be rejected. The effect of the failure to serve on the petitioner the notice containing paragraphs 4 and 8 does not need to be considered, since the necessary factual basis is wanting in the instant case. Even if the infirmity pointed out by the learned counsel for the petitioner were to be taker, as factually correct, the petitioner has n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsel for the petitioner for another reason. Even if the petitioner was not fully heard by the Income-tax Officer or had not been heard at all, the petitioner had filed an appeal. He had no grievance about opportunity of hearing being provided to him by the appellate or revisional authority. The order of the Income-tax Officer having merged in the orders of the Appellate Assistant Commissioner and the Commissioner of Income-tax, the grievance of not having been provided the opportunity to make his submissions is absolutely without any substance. Reference may be made to the case of Sheopujan Choudbury v. State of Bihar, AIR 1956 Pat 212. A similar contention was raised in that case. The petitioner had made a grievance that he had not been given an opportunity of hearing by the Deputy Commissioner although he had been heard by the appellate authority in an appeal filed against the order of the Deputy Commissioner. Ramaswami J., as he then was, on difference of opinion between Rai and Sinha JJ. observed as follows : " It is true that there was no oral hearing given to the petitioner before the licence was cancelled. But it is not a correct proposition to say that the principle of au ..... X X X X Extracts X X X X X X X X Extracts X X X X
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