TMI Blog1996 (12) TMI 133X X X X Extracts X X X X X X X X Extracts X X X X ..... tioned two questions because this Tribunal, while allowing the Revenue's appeal have considered the decisions relied upon by the assessee's counsel which are enumerated in para 5 of the Tribunal's appeal order dated 29-11-1994 and also considered the decision of the Hon'ble Supreme Court in the case of Ganesh Dass Sreeram v. ITO [1988] 169 ITR 221 and found that none of the case laws could assist the assessee's case. Further the Tribunal, while allowing the revenue's appeal relied upon the Full Bench decision of the Hon'ble Patna High Court rendered in the case of Jamunadas Munnalal v. CIT [1985] 152 ITR 261/20 Taxman 437. Since the controversy stands covered by the decision of the jurisdictional High Court in the aforesaid case of Jamunadas Munnala1, it will be futile and also of academic interest to refer the abovementioned two questions sought for by the assessee. 3. The assessee's counsel, Shri A.K. Rastogi, however, made very strenuous efforts to convince us that reference of the above two questions may be made to their Lordships of the Patna High Court particularly in view of the decision of the Hon'ble Supreme Court in the case of Ganesh Dass Sreeram which was not availabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and CIT v. Braham Prakash Co. [1989] 179 ITR 422/[1990] 48 Taxman 201 (Punj. Har.) and two more decisions. The Tribunal took a view that the decision of the Hon'ble Supreme Court in the case of Ganesh Dass Sreeram related to interest leviable under section 139(8), for which there was no provision corresponding to section 271(2) of the Act, where it was laid down that for the purpose of levy of penalty the firm is to be treated as unregistered firm and the tax assessed is to be determined accordingly. It was, thereafter, held that penalty was leviable and the order of the CIT(Appeals) was reversed. 6. The learned counsel for the assessee has placed before us a decision of the SMC Bench of the Tribunal at Patna in the case of ITO v. Kapildeo Prasad [IT Appeal No. 195 (Pat.) of 1988 dated 9-11-1989] for assessment year 1983-84 where a similar issue was involved and it was held that the ratio laid down by the Hon'ble Supreme Court in the case of Ganesh Dass Sreeram for levy of interest will be equally applicable for imposition of penalty. He also relied on the following decisions:--- 1. Builders Engineers Co. 's case 2. CIT v. Harish Chand Co. [1989] 179 ITR 419/45 Taxman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss Sreeram's case was followed and it was held that no penalty is leviable under section 271(1)(a) of the income-tax Act, 1961 for delay in filing the return where the tax deducted at source or paid in advance is equal to or exceeds the assessed tax payable by registered firm. 11. On the other hand, there is a contrary decision of the M.P. High Court in the case of Kaluram Ladharam v. CIT [1989] 44 Taxman 219. After noticing the decision of the Supreme Court in the case of Ganesh Dass Sreeram as well as the decision of the Rajasthan High Court in Builders Engineers Co.'s case, it was held that the decision of the Supreme Court deals with the question of charging interest when the return is filed beyond time and is not attracted in considering the imposition of penalty under section 271(1)(a). It was held that in order to calculate penalty the tax payable by the assessee on the income assessed has to be determined on the basis that the assessee is an unregistered firm and the penalty has to be calculated on the tax so determined. It was further held that penalty was imposable under section 271(1)(a), read with section 271(2) of the Act. It may be stated that this decision was ment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee being a registered firm was liable to pay penalty under section 271(1)(a), read with section 271(2) of the Income-tax Act, 1961 even though the tax deducted at source exceeded the tax payable as a registered firm?" THIRD MEMBER ORDER Per Shri T.V. Rajagopala Rao, President --- This is a Reference Application in the disposal of which the two learned Members differed with each other. The point of difference is referred to Third Member and it is as follows :--- "Whether, on the facts and in the circumstances of the case, the assessee being a registered firm was liable to pay penalty under section 271(1)(a), read with section 271(2) of the Income-tax Act, 1961 even though the tax deducted at source exceeded the tax payable as a registered firm ?" 2. The President constituted himself as a Third Member and had taken up the disposal of the matter. The facts necessary for disposal are the following : The assessee is a registered firm which derives income from contracts. For the assessment year 1985-86, the due date for filing of the income-tax return was on or before 31-7-1985. However, it did not file its return till 11-1-1988. Penalty proceedings were consequently in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igh Court under section 256(1) should have been granted and I fully agree with the Accountant Member's order dated 9-3-1995. It is noteworthy that when the Reference was heard earlier by the Division Bench Members it was submitted before them that the Patna High Court's Full Bench decision is not worthy to be followed inasmuch as by the date of the judgment of the Full Bench they had not the advantage of having the decision of the Hon'ble Supreme Court in Ganesh Dass Sreeram's case and, therefore, the Full bench decision of the Patna High Court should not have been preferred to be followed while reversing the order of the first appellate authority. While recording this argument in his order, the learned Judicial Member held "Whatever may be the situation, we are bound by the Full Bench decision of the Hon'ble Patna High Court which has been followed by this Tribunal while reversing the order of the first appellate authority and allowing the Revenue's appeal'. Thus, he rejected the application. It is significant to note that the CIT(Appeals) while cancelling the penalty levied by the ITO had followed the Hon'ble Supreme Court's decision in Ganesh Dass Sreeram's case. Now while argui ..... X X X X Extracts X X X X X X X X Extracts X X X X
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