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income-tax Officer Vs. Parmod Kumar - Court Judgment

LegalCrystal Citation
CourtIncome Tax Appellate Tribunal ITAT Amritsar
Decided On
Judge
Reported in(1984)10ITD309(Asr.)
Appellantincome-tax Officer
RespondentParmod Kumar
Excerpt:
.....appeal of the revenue for the assessment year 1980-81 against the order of the aac cancelling the penalty imposed by the ito under section 273(1)(b) of the income-tax act, 1961 ('the act'). this appeal was taken up along with two other similar appeals of the same counsel being it appeal no. 176 (chd.) of 1983-ito v. smt. anita gupta and it appeal no. 181 (chd.) 1983-ito v. tej ram brij lal. the relevant facts in all the three appeals are undisputedly similar and the aac has passed a similar order in the three cases. as a result, our decision in this appeal will also govern the disposal of other two appeals.2. all the three appeals are disposed of after considering the written submissions and the papers included in the paper book filed on behalf of each assessee and hearing the.....
Judgment:
1. This is an appeal of the revenue for the assessment year 1980-81 against the order of the AAC cancelling the penalty imposed by the ITO under Section 273(1)(b) of the Income-tax Act, 1961 ('the Act'). This appeal was taken up along with two other similar appeals of the same counsel being IT Appeal No. 176 (Chd.) of 1983-ITO v. Smt. Anita Gupta and IT Appeal No. 181 (Chd.) 1983-ITO v. Tej Ram Brij Lal. The relevant facts in all the three appeals are undisputedly similar and the AAC has passed a similar order in the three cases. As a result, our decision in this appeal will also govern the disposal of other two appeals.

2. All the three appeals are disposed of after considering the written submissions and the papers included in the paper book filed on behalf of each assessee and hearing the departmental representative.

3. The relevant facts in each case as are found from the orders of the lower authorities and also from statement of facts included in each paper book are that each assessee paid advance tax by the due date 15-9-1979 on the basis of income assessed for the assessment year 1979-80 but no statement as required by Section 209A(1) of the Act was filed in each case. The ITO has chosen to penalise each assessee for this failure to file the statement as required by Section 209A(1)(a).

We find that each appeal deserves to be decided on the short ground whether in this factual background a penalty could be imposed by the ITO. We do not consider it necessary to go into the questions considered by the AAC to cancel the penalties in the three cases. In our view, the conclusion of the AAC is clearly sustainable on the basis of position of law settled by the Supreme Court decision in the famous case of Hindustan Steel Ltd. v. State of Orissa [1972] 83 ITR 26. We are tempted to quote the relevant paragraph from the headnotes ; An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceeding and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. 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 penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute. (p. 26) On the facts and in the circumstances of the three cases in hand what else it is but a case of mere technical or venial breach of the provisions of law The object of inserting Section 209A(1) was to ensure that an assessee already assessed also voluntarily calculated and paid the advance tax due. The assessee had paid advance tax due for first instalment and had merely failed to file the statement. Later on the assessee filed two estimates on account of increase in income liable to advance tax. In these circumstances, we see no justification on the part of the ITO to invoke the penal provisions of Section 273(1)(b), therefore, the penalties imposed in all the three cases are unwarranted and for this reasoning have to be held to be rightly cancelled by the AAC. It is unnecessary to go into second part of the revenue's ground of appeal No. 1 for the purpose of disposal of these appeals.


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