9911796707
TMI Blog1976 (11) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... e asst. yr. 1970-71 it was filed on 20th May, 1971 though it was due on 4th July, 1970. The ITO imposed penalties of Rs. 9,672 and Rs. 3,793 respectively as he was not satisfied that there was any reasonable cause for the delay in the filing of the returns in both the years. 3. The assessee appealed to the AAC and contended that on the date of imposition of penalty, no tax was outstanding as a registered firm and, therefore, the penalty worked out on that basis would be nil in both the years. The AAC accepted that contention and cancelled the orders of penalty in both the years. 4. In the appeals before us, it was contended on behalf of the Revenue that the AAC had contravened the provisions of law, especially when s. 271(2) required that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bay Benches of the Tribunal. It was also submitted that in view of the scheme of the Act treating the registered firm as a separate taxable entity the provisions of s. 271(2) could be construed only with reference to the computation of the penalty and cannot be applied for ascertaining whether any tax outstanding on the date of the imposition of the penalty. 5. We have carefully considered the rival submissions and we are of the opinion that the Revenue cannot succeed. It is admitted that on the basis of the assessments made on the assessee firm and in view of the taxes already paid before the date of imposition of penalty, no tax was payable by the assessee on the date of imposition of penalty. The case of the Revenue is that in ascertain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te fifty per cent of the assessed tax". An Explanation was added:-- "Explanation: In this clause assessed tax means tax as reduced by the sum, if any, deducted at source under Chapter XVIIB and paid in advance under Chapter XVII-C". The effect of the amendment is that the penalty is to be computed only on the assessed tax and if the assessed tax happens to be nil, then no penalty could be imposed. It is obvious that the assessed tax as defined refers to the tax as per assessment order and as such and does not give room for any fiction. When we read this explanation with the provisions of s. 271 (2), it would be clear that the provisions of s. 271 (2) would come into play only if the assessed tax is not nil. No doubt s. 271 (2) states tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t as a registered firm. The Explanation defining the assessed tax indicates that the intention of the Parliament was to exempt from penalty all those assessees who have fully paid the assessed tax even if they might have delayed the filing of the return without reasonable cause. We do not see why this universal rule should not apply even in the case of registered firms where the liability to tax as a registered firm has been fully met. In our opinion, the provisions of s. 271 (2) do not support the claim of the Revenue that the registered firms should be discriminated against and excluded from the common intention of the Explanation defining the assessed tax. It may, be that two views are possible in the construction of s. 271 (2) and its a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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