TMI Blog1981 (9) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... he filing of the return and issued a show-cause notice under s. 10 of the Act. Pursuant to the notice the assessee filed an objection in which mainly it was contended that there had been no failure on the part of the assessee to furnish a return under s. 5 of the Act, and that the delay in the submission of the return was not deliberate and wilful and hence s. 9 of the Act was not applicable. The ITO did not accept the assessee's explanation as satisfactory and imposed penalty in the sum of Rs. 5,500. Aggrieved, the assessee filed an appeal before the AAC and it was contended that since there was no failure on the part of the assessee to furnish the return under s. 5 of the Act, penalty was not exigible under s. 9(a) and reliance was placed on a decision of the Calcutta High Court in Calcutta Chromotype Pvt. Ltd. v. ITO [1971] 80 ITR 627 (Cal). This contention found favour with the AAC and he held that the penalty could not be levied under s. 9(a) of the Act because even though the return was filed after a delay, since it was filed before the making of the assessment, no default was committed. From that order the revenue went up in appeal before the Income-tax Appellate Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment is made. " It would be seen that sub-s. (1) of s. 5 of the Act is analogous to s. 139(1) of the I.T. Act, 1961. Under this sub-section, a voluntary return is required to be furnished on or before the 30th day of September of the assessment year. Sub-section (2) is analogous to sub-s. (2) of s. 139 and it requires the furnishing of a return within thirty days from the date of the service of a notice issued by the ITO if he is of the opinion that a company is assessable under this Act, Sub-section (3) is almost analogous to sub ss. (4) and (5) of s. 139. This sub-section requires that in case a company assessable under this Act has not furnished a return during the time allowed under sub-s. (1) or sub-s. (2) or having furnished a return under either of these two sections, discovers any omission or wrong statement therein, it may furnish a return or a revised return, as the case may be, at any time before the assessment is made. Section 9 provides for penalties. It reads " 9. Penalties.-If the Income-tax Officer , in the course of any proceedings under this Act, is satisfied that any person has, without reasonable cause, failed to furnish the return required unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is higher." In other words, this Act envisages a levy of surtax on excess profits of companies other than those which have no share capital over and above certain figure. Such a company has to file its return for purposes of assessment to income-tax under sub-s. (1) or sub-s. (2) of s. 139 of the I.T. Act, 1961, as the case may be, and in the event of any default in, the filing of such return or in the event of any delay in doing so, penalty shall be exigible under s. 271 (1)(a) of that Act and s. 271 (1)(a) clearly speaks of the failure to furnish the return of total income without reasonable cause under sub-s. (1) of s. 139 or by notice, given under sub-s. (2) of s. 139 or s. 148 or within the time allowed and in the manner required by sub-s. (1) or by such notice, as the case may be. Under the W.T. Act the return of total wealth is required to be filed under s. 14 of that Act and for failure to furnish a return under sub-s. (1) as required or under sub-s. (2) if notice is given, penalty is provided for in s. 17 of that Act.. In section 9 of the Act, however, levy of penalty has been, provided for failure to furnish a return, without reasonable cause, required under s. 5. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of the return. Under s. 9 of the Act the penalty leviable is sum not exceeding the amount of surtax while for default under s.271(1)(a) of, the I.T. Act, the penalty leviable is the sum equal to two per cent. of the assessed tax for every month during which the default continued. Further, Chap. XXII of the I.T. Act provides for offences and prosecutions. Failure to furnish a return of income is one such offence. Similarly, ss. 20 to 22 of the C.(P.)S.T. Act make provisions for offences and prosecutions. These offences are failure to deliver returns, etc., furnishing of false statements and abetment of false returns, etc. Section 20 which provides for a penalty on failure to furnish returns, etc., specifically makes the failure without reasonable cause " to furnish in due time any return under sub-section (2) of section 5 ", a default. It is, therefore, evident that wherever the Legislature intended to provide imposition of penalty or launching of prosecution for any particular default or offence, clear mention of the same was made. In Calcutta Chromotype Pvt. Ltd. [1971] 80 ITR 627 (Cal), the question was of levy of penalty under s. 10 of the S.P.T. Act for failure to file, re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if the interpretation of a fiscal enactment is open to doubt, the construction most beneficial to the subject should be adopted. See CIT v. Vegetable Products Ltd. [1973] 88 ITR 192 (SC), Their Lordships have observed at p. 195: " If we find that language, to be ambiguous or capable of more meanings than one, then we have to adopt that interpretation which favours the assessee, more particularly so because the provision relates to imposition of penalty." Therefore, looking to the scheme of the C. (P.) S.T. Act, the purpose which it was intended to serve and the clear language used in the relevant provisions, we are inclined to agree with the view taken in the Calcutta Chromotype Pvt. Ltd. [1971] 80 ITR 627 (Cal) and hold that the ITO is not entitled to impose a penalty on the ground of the failure to file a return within the time prescribed under sub-s. (1) or sub-s. (2) of s. 5 when the return is filed before the assessment is made and the ITO accepts it and completes the assessment on the basis of such a return. In other words, s. 9 envisages the levy of a penalty for the failure to file a return under s. 5 without reasonable cause and not for the failure to file a return wit ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
