TMI Blog1974 (3) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... d enough to grant the extension of time within which the payment was made. It is stated before us by the appellant's representative that the ITO extended the time for payment on the chalan upto 6th March, 1966 and the payment of tax amounting to Rs. 23,000 was also made within that time. In the circumstances, it is urged that the case does not call for any imposition of penalty. The Departmental Representative, on the other hand, contended that under s. 140A(3), penalty is inevitable for assessee's failure to pay the amount of tax on the basis of the return within the period of one month as prescribed, but that only the rigour of the penalty may be mitigated by reducing the amount of penalty, if considered necessary in the circumstances of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s case and the submissions of the parties. It is not disputed on behalf of the Department that the facts claimed by the assessee both in his letter dt. 9th March, 1972 and before us by the appellant's representative were not correct, though the Departmental Representative submitted that in the absence of the relevant records, he was unable to confirm or deny the same. On the other hand, it was his contention that even if the facts pleaded in the letter as well as before us were correct, that would not make any difference in considering the law applicable but may at best be taken for consideration in fixing the quantum of penalty. In other words, the submissions of the learned Departmental Representative is that the circumstances pleaded may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had acted diligently and bona fide in the matter and had reasonable cause for not paying the amount within the time prescribed. The Department's case is that notwithstanding the fact that the assessee might have reasonable cause, the levy of penalty under s. 149A(3) being mechanical and automatic except for considering the amount of quantum to be fixed at the discretion of the authorities, cancellation of penalty by us would not be correct. We do not agree. In the first place, s. 149A(3) does not prescribe any figure of minimum penalty which must be levied in any case but leaves it to the discretion of the ITO though it does limit the amount of maximum penalty leviable. Secondly, the proviso to the section clearly stipulates that before lev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e provisions of s. 246 enumerates or details the scope of objection that may be raised in an appeal against an order under some of the other sections, as for instance, in cl. (c) where in appeal against the order of assessment under s. 143 or 144, an assessee is entitled to object only to the amount of income assessed, or to the amount of tax determined, or to the amount of loss computed, or to the status under which he is assessed. It is therefore, clear from the provisions of s. 246(o) that the assessee is entitled not only to dispute the quantum of penalty levied under s. 140A(3) but to the very applicability or property of such an order. Our attention was drawn to the provisions of s. 271 to support the contentions of the Department tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. In the result, the appeal is allowed. A.Y. MEHTA, A.M. I have the benefit of going through my learned brother's order. I need not differ from the conclusions arrived at by the learned brother though the reasons are slightly different. 2.The return of income was filed on 22nd Dec., 1965 and the assessee was required to pay tax under s. 140A i.e., self assessment by 23rd Jan., 1966. The payment of tax of Rs. 22,000 was actually made in March, 1966 i.e., within a couple of months of the due date. It has also been stated by the assessee that he had orally requested the ITO to grant him some time for payment of this tax and the extention was granted orally by the ITO and a note was made on the challan issued to the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich should be the quantum of penalty. In my view, these are not the only factors which should be taken into consideration. In this regard. I would like to refer the decision in the case of Hindustan Steel Ltd. vs. State of Orissa reported in (1972) 83 ITR 26 wherein Their Lordships of the Supreme Court in page 29 laid down as under :— "Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose pen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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