TMI Blog1982 (4) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... s justified in so construing section 271(2) as to allow deduction under section 280-0 of the amount of annuity deposit which the assessee might have paid if it were an unregistered firm when, in fact, no annuity deposit had been paid by it? " The assessee is a firm registered under the I.T. Act and carries on business at Kolhapur. The assessee was required to file its return of income for the assessment year 1966-67 by September 30, 1966, under s. 139(1) of the said Act. However, the said return was filed on February 17, 1969, i.e., after a delay of 28 months. The ITO condoned the delay in filing the return of income up to March 31, 1967, and proceeded to levy a penalty of Rs. 29,196, taking the default as from April 1, 1967. An appeal pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... returns. Sub-section (2) of s. 271 reads thus: " When the person liable to penalty is a registered firm or an unregistered firm which has been assessed under clause (b) of section 183, then, notwithstanding anything contained in the other provisions of this Act, the penalty imposable under sub-section (1) shall be the same amount as would be imposable on that firm if that firm were an unregistered firm." A perusal of s. 280A of the said Act shows that an unregistered firm is liable to make payment of annuity deposits, but not a registered firm. Sub-section (1) of s. 280-O reads thus: " Notwithstanding anything to the contrary contained in the provisions of this Act relating to the computation of income chargeable under any head of in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to an unregistered firm. It is true that, being a registered firm, it was really not required to pay any annuity deposit at all, but that, to our mind, would make no difference and it would be entitled to a deduction, in the computation of its total income for the purposes of determination of the tax payable, on which penalty is based, of the amount of the annuity deposit which it would have been required to pay, had it, in fact, been an unregistered firm. We find that the view which we are taking is supported by decision of the Madras High Court in CIT v. Palaniappa Transports [1980] 124 ITR 634, where it has been held that the language of s. 280-0 of the I.T. Act, 1961, namely, " required to be made under this chapter " envisages de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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