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TMI Blog1979 (11) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) Whether the penalty proceedings under sec. 271(1)(a) are not quasi-criminal and whether the burden of proving the explanation tendered by the assessee to be false or his conduct being contumacious is not on the department ? (3) Whether, on the facts and circumstances of the case, the Tribunal was justified in holding that the ratio of the Supreme Court decision in Hindustan Steel Ltd. [1972] 83 ITR 26 was not applicable to the case of the assessee in view of the provisions and their nature specified in section 271(1)(a) of the Income-tax Act, 1961 ? (4) Whether, on the facts and circumstances of the case, the Tribunal was justified in holding that establishing a guilty mind does not arise in penalty proceeding under section 271(1)( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments no evidence was produced to show that the return was delayed for reasons beyond the control of the assessee. The ITO, therefore, held the assessee to be a defaulter under s. 271 (1)(a) of the Act and calculated the penalty at Rs. 3,960 for a default of 12 months, treating the assessee to be an unregistered firm as provided by s. 271(2) of the Act. The assessee preferred an appeal before the AAC before whom the same explanation was repeated by the assessee for the delay in filing the return. The AAC also rejected the explanation of the assessee. He, however, accepted the assessee's submission which was rejected by the ITO that the payment of self-assessment tax of Rs. 1,500 on October 29, 1968, should be considered in computing the pen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x amounting to Rs. 1,500. However, the income assessed was Rs. 48,000 and if the assessee was to be assessed as a registered firm the extra amount of tax payable was Rs. 322. If the assessee was to be assessed as if it were an unregistered firm the extra amount of tax would of course be much more. The view taken by the Tribunal is that the attributes of the unregistered firm to be imagined under s. 271(2) of the Act logically should be the same as are present in the case of the assessee-firm, i.e., it should be presumed for the purpose of the fiction that the unregistered firm has to the like extent paid tax on its returned income. From the tax assessed on the unregistered firm the correct deduction will be the notional amount paid in the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as noticed to show cause why penalty should not be imposed on the ground of delay in filing the return, the assessee stated that he had reasonable cause for filing the return beyond time. The cause shown by the assessee was not accepted by the ITO, the AAC and the Income-tax Tribunal. Thus, it has been held by the authorities concerned that the petitioner has without reasonable cause failed to furnish the return within the time allowed. Therefore, the penalty under s. 271 (1)(a) of the Act was rightly held imposable on the assessee for the delay in filing the return and no question of law arises. The decisions relied upon by the learned counsel for the assessee are not relevant for determination of the question involved in this case. Those ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed firm and on that basis the penalty has to be calculated because the fiction created has to be carried to its logical extent. According to the Tribunal, if the penalty is calculated in this manner the result would be preposterous and that as a registered firm the assessee was required to pay only Rs. 322 as tax while the penalty imposable would be Rs. 3,600 in the circumstances of the case. The interpretation of a statute does not depend upon its consequence, if the language of the statute is clear. We are of the opinion that the language of s. 271(2) of the Act is plain and is not capable of any other meaning. In our opinion in cases covered by s. 271(2) of the Act, in order to calculate the penalty, the tax payable by the assessee on th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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