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TMI Blog1979 (11) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... t in holding that when a firm has been penalised under section 273(a) of the Income-tax Act, 1961, no penalty can be imposed under the said section on its partners ? " 2. (Arising out of I.T. Ref. No. 2 of 1979) Assessment year 1973-74 " (i) Whether a wrong estimate of income filed by a firm under section 212 would constitute a reasonable cause in the case of the partner for the purpose of levy of penalty under section 273(a) of the Income-tax Act, 1961 ? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal is right in deleting the penalty imposed under section 273(a) of the Income-tax Act ? " 3. Arising out of I.T. Ref. Nos. 10, 11, 12 and 13 of 1979) Assessment year 1970-71 (i) Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that non-filing of an estimate under section 212(3A) of the Income-tax Act, 1961, by the firm would constitute a sufficient cause within the meaning of section 273(c) of the Income-tax Act, 1961, for not filing an estimate under section 212(3A) of the Act by the partners ? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee had consciously underestimated his advance tax liability and in these circumstances no penalty should be imposed. The ITO as also the AAC rejected the contention of the assessee and they held that the explanation offered by the assessee was not acceptable and that the failure to furnish the estimate of advance tax was without reasonable cause. Feeling aggrieved, the assessee went up in second appeal. The Income-tax Appellate Tribunal placed reliance on the decision in Venkateswara Power Rolling Mills v. CIT [1974] 97 ITR 168 (Mys) and Addl. CIT v. Smt. Triveni Devi [1974] 97 ITR 390 (All) and accepted the appeal. The Tribunal while accepting the assessee's pleas observed as under : " In our opinion, the contention of the learned counsel for the assessee has considerable force. Since the assessee's main source of income was share from the firm, M/s. Pratap Steel Rolling Mills and the assessee filed his own estimate of advance on the basis of the estimate filed by the firm on 15-9-1971, it cannot be said that the assessee under section 212 of the Income-tax Act, 1961, furnished an estimate of advance tax which he knew or had reasons to believe to be untrue. On the other han ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s furnished of his income by the assessee are inaccurate or such particulars are concealed. The relevant part of this section is as follows : " (1) If the Income-tax Officer or the Appellate Assistant Commissioner, in the course of any proceedings under this Act, is satisfied that, any person--... (c) has concealed the particulars of his income or furnished inaccurate particulars of such income, he may direct that such person shall pay by way of penalty ........" The provisions of ss. 271 and 273 are in pari materia. The imposition of penalty under s. 271 is of penal nature, so is the penalty which is imposed under s. 273 of the Act. After hearing the learned counsel for the parties we are of the considered view that the matters involved in I.T. Ref. No. 15 of 1979 are not res integra. The subject-matter of question No. 1 stands covered by an authoritative decision of the Supreme Court in CIT v. Anwar Ali [1970] 76 ITR 696, and we see no distinguishing features as to take the matter away from the cover of the ratio of the said decision as would be presently shown. Prior to the decision in Anwar Ali's case [1970] 76 ITR 696 (SC), different views were taken as to on whom lies th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. The Tribunal relied upon these and other grounds set out in support of its conclusion that the failure to furnish return within time was without reasonable cause. Their Lordships of the Supreme Court, while accepting the plea of the revenue, observed that on an overall view of all the circumstances of the case, the Tribunal's finding that the default in the case was without reasonable cause was unassailable. To the case in hand, the decisions of this court in Addl. CIT v. Bipan Lal Kuthiala [1975] 98 ITR 343 and that of Addl. CIT v. Smt. Triveni Devi [1974) 97 ITR 390 (All) aptly apply. The ratio of these decisions is clearly attracted and has been rightly followed by the Tribunal. The question whether or not the assessee failed without reasonable cause to furnish estimate of advance tax within time is primarily and essentially a question of fact to be decided in each case on a consideration of all the relevant circumstances. In the present case, there is nothing on the record to show if the assessee had deliberately furnished inaccurate particulars. The books of accounts of the firm had not been finalised by September 15, 1971, and in fact, the return of income was filed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax imposed upon a firm is, in fact, a tax upon the partners. Penalty is nothing but an additional tax and the principle contained in section 86(iii) of the Income-tax Act, 1961, would apply as much to penalty as to tax. Even if penalty is regarded as punishment, a person cannot be punished more than once in respect of the same offence. Hence, penalty for concealment of income cannot be levied once in the hands of the firm and again in the hands of its partners.
Similar view was adopted in the decision of this court in Pearl Woollen Mills v. CIT [1980] 123 ITR 658. With respect, we entirely concur in the view aforesaid. Once that is so, the case of the assessee is clearly within the ratio of the cases upon which reliance has been rightly placed by Mr. Desai.
In view of our answer to questions Nos.(i) and (ii) in I.T. Ref. No. 15 of 1979, we answer the questions referred for opinion in I.T. Refs. Nos. 2, 10 to 14, 16, 17 of 1979 and 38, 39, 40 and 46 of 1978, in favour of the assessees and against the department and dispose of the references accordingly. The parties are left to bear their own costs.
B. S. DHILLON J.--I agree.
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