TMI Blog1976 (11) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... r the assessment year 1965-66 ? 3. Whether the Income-tax Officer was justified in levying a penalty of Rs. 6,050 under section 271(1)(a) for the assessment year 1966-67?" Admittedly, in this case, the assessee did not file the returns for the three years in question in time. The actual dates on which the returns were due and the dates on which the returns were filed and the penalty levied by the Income-tax Officer under section 271(1)(a) are shown hereunder : --------------------------------------------------------------------------------------------------------------------------------------------------- Assessment Due date for Date of actual Penalty levied year filing the return filing of the by the returns Income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tered firm. The Tribunal, by its order dated September 13, 1971, accepted this contentention of the department, allowed the appeals preferred by the department, set aside the order of the Appellate Assistant Commissioner and restored the orders of the Income-tax Officer. It is the correctness of this order of the Tribunal that is challenged in the form of the three questions extracted already, relevant for the three assessment years. Section 271(1)(a)(i) is the relevant section and the same 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-- (a) has without reasonable cause failed to furnish the return of his total inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had incurred the liability to penalty but reducing the quantum of the penalty imposed by the Income-tax Officer. Consequently, the only question that arises for consideration is as to whether the Tribunal was right in holding that section 271(2) is applicable to the case and the Appellate Assistant Commissioner was wrong in bifurcating the section by imposing the penalty as if the assessee was an unregistered firm but restricting the maximum amount to 50 per cent. of the tax payable by the assessee as a registered firm. As a matter of fact, the Tribunal has stated in its order thus : "Under section 271 (1)(i), the amount of penalty has to be calculated on the basis of the tax payable by the assessee. When penalty has to be calculated in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 271(2) was not at all attracted to the present case because the fiction to apply should have been created by section 271(1) itself and the fiction not having been created by section 271 (1) itself, the fiction created under section 271(2) did not apply. We are unable to appreciate this argument. The language of sub-section (2) of section 271 is couched in the widest possible language and it has got the overriding effect in view of the express provisions contained therein, namely, "notwithstanding anything contained in the other provisions of this Act". Consequently, whether this sub-section finds a place as a separate sub-section or finds a place as a part of section 271(1), the language is clear and categorical and applies to the present c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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