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C.I.T v. M/S S.K. Pankaj Kumar - INCOME TAX REFERENCE No. 114 of 1995 [2005] RD-AH 983 (6 April 2005)


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Court No.37

Income Tax Reference No.114 of 1995

Commissioner of Income tax, Lucknow v. M/s Surendra Kumar Pankaj Kumar, Bahraich.

Hon'ble R.K.Agrawal, J.

Hon'ble Rajes Kumar, J.

The Income Tax Appellate Tribunal, New Allahabad, has referred the following question of law under Section 256(1) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") for opinion to this Court:-

"Whether on the facts and in the circumstances of the case, and having due regard to the provisions of Sec.271(2) of the I.T.Act, 1961, the Tribunal was, in law, justified in confirming the D.C.(Appeal)'s action in canceling the penalty levied u/s 271(1)(a) of the I.T.Act, 1961?"

The present Reference relates to the Assessment Year 1982-83 and 1983-84 in the proceeding for imposition of penalty under Section 271(1)(a) of the Act.

Briefly stated the facts giving rise of the present Reference are as follows:

The respondent-assessee has been assessed to income tax in the status of a registered firm for the assessment year in question. The due dates for filing the return of income under Section 139(1) of the Act were 31st July, 1982 and 31st July, 1983 respectively but the returns were filed on 27th January, 1986 for the Assessment Year 1982-83 and on 12th December, 1986 for the Assessment Year 1983-84. As the returns had been filed late the Assessing Officer initiated proceeding for imposition of penalty under Section 271(1)(a) of the Act and after giving an opportunity of hearing imposed penalties of Rs. 7,637/- and 12,100/- respectively. Feeling aggrieved the respondent preferred separate appeal before the Deputy Commissioner of Income Tax (Appeals) who had cancelled the penalties on the ground that for both the years the tax assessed was less than the advance tax deposited. The Revenue, feeling aggrieved, preferred further appeal before the Tribunal. The Tribunal has dismissed the Revenue's appeal and had confirmed the order passed by the Deputy Commissioner of Income Tax (Appeals).

We have heard Sri R.K.Upadhyaya, the learned counsel for the Revenue.  Sri A.W.Siddiqui, has filed his appearance on behalf of the respondent.

We find that this Court in I.T.R. No. 21 of 1995 C.I.T. vs. Chauhan Brothers decided on 1st April, 1995 has held that for imposition of penalty upon a registered firm in view of the provisions of Section 271(2) of the Act the status has to be treated as unregistered firm and the liability for tax and the tax deposited has to be reckoned from that point of view. In this view of the matter the Tribunal was not justified in upholding the order of the Deputy Commissioner of Income Tax (Appeals) deleting the penalty. However, we may mention here that if the tax deposited by the respondent is much more than the tax computed on the basis of the situation being taken as unregistered firm, in that event the penalty would not imposable. The Tribunal has not considered this aspect of the matter. While passing the consequential order the Tribunal is directed to go into this aspect as well.

However, there shall be no order as to costs.




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