TMI Blog1996 (7) TMI 189X X X X Extracts X X X X X X X X Extracts X X X X ..... esentative has submitted that the CIT(A) was not justified in cancelling the penalty relying on the decision of the Hon'ble Supreme Court in the case of Ganeshdas Shriram vs. CIT (1987) 66 CTR (SC) 135 : (1988) 169 ITR 221 (SC). He submitted that the decision of the Hon'ble Supreme Court was not applicable to the instant case. The Hon'ble Supreme Court has held that where the advance tax paid covers the entire amount of tax assessed, there is no question of charging a registered firm with interest even though the return is filed beyond the time allowed. He further submitted that in that case the return was submitted voluntarily by the assessee under s. 139(4) beyond the period mentioned in s. 139(1) or (2) before the assessment and before the end of four assessment years mentioned therein. In the instant case, the assessee did not file the return either within the time allowed under s. 139(1) of the Act or within the period given as per notice issued under s. 148 of the Act. At the most, relaxation in imposing the penalty can only be given when the return could have been filed voluntarily by the assessee. The learned Departmental Representative submitted that the notice under s. 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1984 but the delay was condoned by the issuance of notice under s. 148 and as per the notice under s. 148 which was received by the assessee on 5th July, 1987 the return was due to be filed within 30 days, i.e., 4th Aug., 1987 and the return was filed on 10th Aug., 1987 whereby there was a delay of only six days and this being less than one month, no penalty would be leviable. He further submitted that the return in this case was not filed under s. 139(1) of the Act since no tax was payable as TDS having been paid in excess which has resulted in refund of Rs. 13,024 even after the assessment. The counsel for the assessee strongly relied on the judgments in the case of CIT vs. Marfatia Co. (1982) 136 ITR 159 (MP), CIT vs. Ganesh Das Sreeram (Firm) (1982) 30 CTR (Gau) 302 : (1983) 141 ITR 946 (Gau), CIT vs. Builders Engineers Co. (1988) 73 CTR (Raj) 230 : (1989) 175 ITR 317 (Raj), P. Venkata Krishnayya Naidu Sons vs. CIT (1985) 49 CTR (AP) 278 : (1984) 150 ITR 547 (AP), CIT vs. Maskara Tea Estate (1981) 21 CTR (Gau) 47 : (1981) 130 ITR 955 (Gau) and Ganesh Dass Sreeram vs. ITO (1987) 66 CTR (SC) 135 : (1988) 169 ITR 221 (SC) and emphatically submitted that in view of these judg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of notice under s. 139(2) or 148 of the Act. If the assessee does not file the return inspite of notice under s. 133(2)/148 of the Act, his offence of not filing the return may be considered more grave. The issuance of notice under s. 148 or 139 will not condone the delay in filing the return under s. 139(1) of the Act. This issue was discussed by the Hon'ble Orissa High Court in the case of Ravi Talkies in which they have held that where there are deficiency in taxing statute, the provision should be interpreted in favour of the taxpayer, but where the provision is clear, it is not open to the Court to treat the situation as a case of ambiguity and interpret it in favour of the taxpayer. Therefore, the issue of a notice under s. 139(2) does not wipe out the liability of penalty under s. 271(1)(a) for default under s. 139(1) and it cannot be held that the penalty should be confined to the period after the issue of the notice under s. 139(2) or 148 of the Act. We have carefully examined the judgment of the Supreme Court in the case of Ganesh Dass Shreeram vs. ITO but the facts of that case are different from the instant case as in that case the return was voluntarily filed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l. (a), (b) or (c) of sub-s. (1) of s. 271 was sufficient to visit the assessee with penal consequences. If any change in this established rule of interpretation was contemplated by parliament while enacting the amending Act of 1974 which would have had the effect of making a departure from the established interpretation in regard to the corresponding penalty provision in the 1922 Act, it was expected that a specific provision would have been made making the intention of Parliament clear and not to leave the matter to varying interpretations. In this background, it is apparent that it was never intended while enacting the amending Act, that cl. (i) together with its Explanation was to be read as an exception to cl. (a) of s. 271(1). Hence, where a registered firm fails to furnish its returns on time, penalty can be imposed on it under the provisions of s. 271(1)(a). The penalty cannot be cancelled on the ground that the registered firm had not committed default in paying its tax." We have also examined the judgment in the case of CIT vs. Birla Engineering Co. but we do not find any assistance from the judgments in favour of the assessee as in that case also the return was volunta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter is within his special knowledge. This burden can be discharged by preponderance of probabilities as in a civil case and not necessarily by proof beyond a reasonable doubt. These observations were taken by the Hon'ble Orissa High Court in the case of CIT vs. Gagaram Chapolia but in the instant case the assessee did not make any effort to show any reasonable cause of not filing the return within the stipulated time under s. 139(1) even after receiving the notice under s. 148 of the Act. Instead of disclosing the reasons for not filing the return within the stipulated time, the assessee contended that he had paid the advance-tax much more than the tax due from the assessee. Since no tax was payable, the return was not filed under s. 139(1) of the Act. These are not sufficient grounds for condoning the delay caused by the assessee in filing the return. Once it is established that the return has not been intentionally filed within the stipulated period under s. 139(1) or within the period mentioned in the notice issued under s. 148 of the Act, the AO has no other option but to initiate the penalty proceedings under s. 271(1)(a) of the Act. Once the AO has formed an opinion under s. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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