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TMI Blog1971 (7) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... osing a penalty of Rs. 2,209 on the ground that the assessee had not filed the returns of income in time. On appeal for the assessment year 1960-61, the Appellate Assistant Commissioner of Income-tax, although finding that the assessee was guilty of default in complying with the notice under section 22(1) of the Act of 1922, and that, therefore, section 271(1)(a) of the Act of 1961 was attracted, reduced the penalty to Rs. 1,800. The assessee proceeded in further appeal to the Income-tax Appellate Tribunal. The Appellate Tribunal also held that the assessee had committed a default under section 271(1)(a) and that a penalty should be imposed under that provision. However it reduced the penalty further to a nominal sum of Rs. 200 only. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fault in filing the return within time, and if that discretion is available to him it cannot be said that he cannot reduce the amount of penalty below the level mentioned in section 271(1)(i). In our opinion, neither of the contentions urged on behalf of the assessee is well-founded. It seems to us that the Tribunal, while disposing of an appeal in a case arising out of a penalty proceeding under section 271(1) has the same limits set to its jurisdiction as govern the jurisdiction of the Income- tax Officer. There can be no dispute that the jurisdiction exercised by the Tribunal is an appellate jurisdiction. The general principle is that an appellate court or Tribunal has only that jurisdiction which was possessed by the court or Tribunal f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iple to which we have already alluded. Therefore, in our opinion, the jurisdiction of the Tribunal " to pass such orders thereon as it thinks fit " in respect of an appeal before it must be orders within limits which we can discover by reference to the jurisdiction of the authority whose order has given rise to the appeal. Ordinarily that would be the Appellate Assistant Commissioner of Income-tax, but it is not disputed that for the purposes of the present case, if this general principle applies, we must go down to the order of the Income-tax Officer. The power to impose, a penalty for failing to furnish a return of income within the statutory period is set out in section 271. The section provides : "271. Failure to furnish returns, compl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal to reduce or waive the penalty it would have clearly and expressly done so. It has done so in the case of the Commissioner of Income-tax by enacting section 271(4A). We may with advantage refer to the observations of the Calcutta High Court in Commissioner of Income-tax v. A. K. Das , in a case of penalty under section 271(1)(iii) of the Act. The learned judges observed : " The expression 'such orders as it thinks fit ' (under section 251) cannot mean an order against the statutory mandate imposing limits of penalty under section 271(1)(iii) of the Act of 1961. The words ' as it thinks fit ' in section 254(1) of the Income-tax Act, 1961, even then will have to observe the prohibitions of the Income-tax Act, and do not mean that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatute has specified a minimum limit and a maximum limit. Consequently, it refers to " a sum which, shall not be less than .... but which shall not exceed . ... " as the basis for determining the quantum of penalty. The Tribunal has observed that the rate of 2% mentioned in sub-clause (i) is not a uniform rate but is the maximum rate up to which the Income-tax Officer can impose a penalty in a case falling under section 271(1)(a). Upon the considerations which have found favour with us this conclusion cannot be accepted at all. It might have been possible to agree with the Tribunal if sub-clause (i) had read " in the cases referred to in clause (a), in addition to the amount of tax, if any, payable by him, a sum upto 2% of the tax for every ..... X X X X Extracts X X X X X X X X Extracts X X X X
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