TMI Blog1978 (2) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... produce before the Tribunal the material on the basis of which the principle indicated in the aforesaid Supreme Court decision could be applied. It was further claimed that in view of the decision of the Orissa High Court in the case of Ali Mohamed Co. 40 CLT 208 (Ori) the burden of showing the failure to file the return without reasonable cause was on the Department and in the absence of any material on record to prove failure of the assessee, penalty could not be sustained. The Tribunal took the view that the Revenue had failed to place material on record from which it could be gathered that the failure to make the return was without reasonable cause and accordingly the Tribunal cancelled the penalty aforementioned. 4. On the afores ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng it to the facts of the case." 6. Before us the learned counsel for the assessee filed details showing payment of Tax before the date of penalty and claimed that no tax was payable rather refund was due to the assessee on that date. He, therefore, submitted that no penalty could be imposed, in this case, in view of the decision of the Supreme Court in the case of Vagetable Products Ltd. Reference was also made to the order of the Tribunal, Bombay Bench 'C' in the case of Magniram Sardarmal 1977 Tax 37(6)-129 (Bom) for the same proposition. The learned Departmental Representative on the other hand, took us through the language of the relevant sections and contended that in consequence of the amendment to s. 271(1) by Direct Taxes (Amend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the amendment of s. 271(1) by the Direct Taxes (Amendment) Act, 1974, that controversy does not longer exist. The amended provision of section made it clear that quantum of penalty has to be calculated on the basis of "assessed tax" irrespective of whether the tax was due and outstanding on the date of levy of penalty. The meaning of the term "assessed tax" is given as the tax as reduced by the sum, if any, deducted at source or paid in advance in accordance with the provision of the Act. It is, therefore, abundantly clear that in order to compute the quantum of penalty only the tax deducted at source or the advance tax paid by the assessee, as the case may be has to be deducted and the assessee is not entitled to any further deduction. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is, therefore, clear from the language of the section that the very object of s. 271(2) is to treat a registered firm as if it were an un-registered firm for the purpose of levy of penalty, once it commits default, notwithstanding the privilege it enjoys with regard to quantum of tax payable by it. We find support for this view of ours from the decision of the Gujarat High Court in the case of Gujarat Automogiles 1977 CTR (Guj) 33 : 105 ITR 588 (Guj)) and Kandaswamy Weaving Factory Co. 1977 CTR (Mad) 366 : 110 ITR 84 (Mad). We are, therefore, of the opinion that the contention of the assessee's counsel that the penalty imposable in this case should be calculated on the basis of assessed tax on it as a registered firm or the quantum of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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