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Commissioner of Income-tax Vs. R.B.L. Banarsi Dass and Co. (P.) Ltd. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtPunjab and Haryana High Court
Decided On
Case NumberIncome-tax Reference No. 14 of 1974
Judge
Reported in[1977]108ITR554(P& H)
ActsIncome Tax Act, 1961 - Sections 140(1), 140(3) and 140A
AppellantCommissioner of Income-tax
RespondentR.B.L. Banarsi Dass and Co. (P.) Ltd.
Appellant Advocate D.N. Awasthy and; B.K. Jhingan, Advs.
Respondent Advocate B.S. Gupta and; Gurder Singh, Advs.
Excerpt:
.....the word judgment as defined under section 2(9) means a statement given by a judge on the grounds of a decree or order. thus the contention that against an order passed by a single judge in an appeal filed under section 104 c.p.c., a further appeal lies to a division bench cannot be accepted. the newly incorporated section 100a in clear and specific terms prohibits further appeal against the decree and judgment or order of a single judge to a division bench notwithstanding anything contained in the letters patent. the letters patent which provides for further appeal to a division bench remains intact, but the right to prefer a further appeal is taken away even in respect of the matters arising under the special enactments or other instruments having the force of law be it..........shri awasthy laysstress on the words 'shall be liable to pay'. but what the assessee isunder an obligation to pay as penalty is such amount as the income-taxofficer may direct. that necessarily implies that it is open to the income-tax officer to levy a penalty or not at all. 3. we, therefore, answer the question referred to us against the revenue.we are not expressing any opinion on the merits of the case. the referenceis answered accordingly. no costs.
Judgment:

Chinnappa Reddy, J.

1. The assessee filed a return for the assessment year 1967-68 declaring an income of Rs. 2,27,113. He did not pay the tax payable on self-assessment, nor did he subsequently pay the tax when assessment was made on provisional basis, within the prescribed period. Later on, the assessee appears to have paid substantial part of the tax levied. Thereafter, the Income-tax Officer levied a penalty of Rs. 17,000 under Section 140A(3). This was reduced to Rs. 10,000 by the Appellate Assistant Commissioner on the ground that the assessee was in financial difficulties. The Income-tax Appellate Tribunal deleted the penalty altogether on the ground that the assessee had ultimately paid the entire tax and the Government suffered no loss. At the instance of the revenue, the following question has been referred to us for our decision:

'Whether, on the facts and in the circumstances of the case, the Tribunal was justified in deleting the penalty of Rs. 10,000 levied under Section 140A(3) of the Income-tax Act, 1961 ?'

2. Shri Awasthy, learned counsel for the department, argues that the levy of penalty is automatic on the commission of a default by the assessee under Section 140A. There is no substance in this submission. There is a proviso to Section 140A(3) expressly providing for reasonable opportunity being given to the assessee before the levy of any such penalty which wouldbecome meaningless if levy of penalty is automatic. Shri Awasthy laysstress on the words 'shall be liable to pay'. But what the assessee isunder an obligation to pay as penalty is such amount as the Income-taxOfficer may direct. That necessarily implies that it is open to the Income-tax Officer to levy a penalty or not at all.

3. We, therefore, answer the question referred to us against the revenue.We are not expressing any opinion on the merits of the case. The referenceis answered accordingly. No costs.


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