9911796707
TMI Blog1992 (4) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... ile the assessee, the respondent, is one and the same. The three assessment years in question are 1964-65, 1965-66 and 1966-67. For the year 1964-65, the assessee returned an income of Rs. 48,000 while he was assessed on an income of Rs. 58,557 imposing a penalty of Rs. 9,690. For the year 1965-66, the assessee returned an income of Rs. 45,000. He was assessed on an income of Rs. 52,337 together with levy of penalty of Rs. 6,115. For the year 1966-67, he returned an income of Rs. 51,000 while he was assessed on an income of Rs. 62,560 and a penalty of Rs. 3,915 was imposed. It requires to be stated at this stage that, for the respective assessment years, the returns, as per the statute, ought to have been filed on July 31, 1964, July 31, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause" have been set out in the section providing for penalty, the burden is on the Revenue to prove the absence of "reasonable cause". Thus, the Division Bench felt that since these decisions, though related to sales tax, had a direct bearing on the interpretation of section 271(1)(a) of the Act, the reference comes to be made. The Full Bench of the Gujarat High Court, after referring to case-law, ultimately disagreed with the view expressed by the Full Bench of the Kerala High Court in CIT v. Gujarat Travancore Agency [1976] 103 ITR 149 and concluded as under : "In the light of the above discussion, our conclusions are as follows (at page 235 of 107 ITR) : (1) Under section 271(1)(a) of the Income-tax Act, 1961, failure without reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld that the view expressed by the Tribunal that the assessee had shown "reasonable cause" is not erroneous on the facts and in the circumstances of the case. Accordingly, the reference was answered in the affirmative and against the Revenue. It is under these circumstances that the civil appeals have to be preferred by the Revenue. Mr. J. Ramamurthy, learned counsel appearing for the Revenue, would submit that the decision of the Kerala High Court reported in [1976] 103 ITR 149 [FB] (CIT v. Gujarat Tranvancore Agency), which has differed from in the impugned judgment, which is now reported in [1977] 107 ITR 214 (Guj) [FB] (Addl. CIT v. L M. Patel and Co.), has come to be affirmed by this court in Gujarat Travancore Agency v. CIT [1989] 177 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to this, learned counsel for the assessee drew our attention to the passages occurring in the impugned judgment wherein the requirement of proving mens rea had come to be insisted upon. According to him, there is not much of a difference between a case falling under section 271(1)(a) or sub-section (1)(c). We have given our careful consideration to the above submissions. We are of the view that the Revenue is entitled to succeed. As a matter of fact, the very question with which we are concerned is no longer res integra as has rightly been pointed out by Mr. Ramamurthy. In Gujarat Travancore Agency v. CIT [1989] 177 ITR 455, 457, this court answered the question in the following words : "Learned counsel for the assessee has addressed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is punitive, no sentence can be imposed under that provision unless the element of mens rea is established. In most cases of criminal liability, the intention of the Legislature is that the penalty should serve as a deterrent. The creation of an offence by statute proceeds on the assumption that society suffers injury by the act or omission of the defaulter and that a deterrent sentence must be imposed to discourage the repetition of the offence. In the case of a proceeding under section 271(1)(a), however, it seems that the intention of the Legislature is to emphasise the fact of loss of revenue and to provide a remedy for such loss, although no doubt an element of coercion is present in the penalty. In this connection, the terms in ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
