1992 (10) TMI 13

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..... at the instance of the Revenue, in respect of the assessment years 1963-64, 1964-65 and 1968-69, refers the following question for the opinion of this court : "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was correct in cancelling the penalties levied by the Income-tax Officer under section 221 for non-payment of penalties imposed under section 271(1)(c) for .....

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..... the Appellate Assistant Commissioner failed. The Tribunal noticing that the expression "tax" has been separately defined in section 2(43) of the Act and also relying on a judgment of the Calcutta High Court in Shreeniwas and Sons v: ITO [1974] 96 ITR 562, cancelled the penalties levied under section 221(1) of the Act. On the application of the Department, the aforesaid question has been referred b .....

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..... er : "2. In this Act, unless the context otherwise requires,-... (43) `tax' in relation to the assessment year commencing on the 1st day of April, 1965, and any subsequent assessment year means income-tax chargeable under the provisions of this Act and in relation to any other assessment year income-tax and super-tax chargeable under the provisions of this Act prior to the aforesaid date ;" .....

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..... f penalty levied under section 271(1)(c) of the Act, the assessee had failed, and, therefore, the assessee was in default in payment of tax. In our view, the Tribunal was fully justified in cancelling the penalties by reading the expression "tax" used in section 221 as defined in section 2(43) of the Act. The Calcutta High Court in Shreeniwas and Sons v. ITO [1974] 96 ITR 562 had to consider the .....

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..... ase of the assessee, the contradistinction is between "tax" and "penalty". In our view, therefore, there was no warrant for imposition of penalty under section 221(1) by the Income-tax Officer for a default or deemed default on the part of the assessee in payment of penalty levied against him under section 271(1)(c) of the Act. In the result, the question referred for the opinion of this court i .....

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