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Commissioner of Income-tax, Delhi-ii Vs. Triveni Engineering Works Ltd. - Court Judgment

LegalCrystal Citation
Subject Direct Taxation
CourtDelhi High Court
Decided On
Case NumberIncome-tax Case No. 106 of 1980
Judge
Reported in(1984)41CTR(Del)97; [1985]154ITR561(Delhi)
ActsCompanies (Profits) Surtax Act, 1964 - Sections 9; Income Tax Act, 1961 - Sections 256(1), 256(2) and 271(1)
AppellantCommissioner of Income-tax, Delhi-ii
RespondentTriveni Engineering Works Ltd.
Excerpt:
- - .....ltd. v. ito [1971] 80 itr 627, where it was held that held that there could be no penalty for the late filing of the return under the super profits tax act. this order has been upheld by the i.t. appellate tribunal.3. learned counsel for the commissioner submitted that this was a question of law. but, the application under s. 256(1) was refused on the ground that since the finding that there was reasonable cause for the delay was a finding of fact, it did not give rise to a question of law.4. we have examined the circumstances of the case and we find that we have to disallow this petition on various grounds. the legal ground relief upon by the aac following the calcutta high court judgment was that there was no penalty prescribed for the late filing of a return. the penalty is or not.....
Judgment:
1. The CIT has sought a reference of the following question under s. 256(2) of the I.T. Act, 1961, to this court :

"Whether, on the facts and in the circumstances of the case, the Tribunal is correct in law in upholding the AAC's order cancelling the penalty of Rs. 1,02,765 imposed by the ITO under s. 9(a) of the Companies Profits (Surtax) Act, for the delayed filing of the return for this year ?"

2. Under the Act, the return had to be filing by September 30, 1969. It was actually filed on January 31, 1970. The ITO rejected the assessed's plea that the delay was on account of the impression that there were no chargeable profits and, hence, there was a delay and accordingly imposed a penalty of Rs. 1,02,765. This penalty was struck down by the AAC following the judgment of the Calcutta High court in Calcutta Chromotype Pvt. Ltd. v. ITO [1971] 80 ITR 627, where it was held that held that there could be no penalty for the late filing of the return under the Super Profits Tax Act. This order has been upheld by the I.T. Appellate Tribunal.

3. Learned counsel for the Commissioner submitted that this was a question of law. But, the application under s. 256(1) was refused on the ground that since the finding that there was reasonable cause for the delay was a finding of fact, it did not give rise to a question of law.

4. We have examined the circumstances of the case and we find that we have to disallow this petition on various grounds. The legal ground relief upon by the AAC following the Calcutta High Court judgment was that there was no penalty prescribed for the late filing of a return. The penalty is or not filing the return. Learned counsel submitted that even a late filing of the return was not a filing in accordance with s. 5 which required the return to be filed by 30the September, each year.

5. In the judgment of the Calcutta High Court aforementioned, reference was made to the fact that the corresponding penalty under the I.T. Act was (a) for not filing a return, and (b) for filing a return late. For this purpose, reference to s. 271(1)(a) of the I.T. Act shows that a penalty may be imposed either for failure to file a return within the time allowed without reasonable cause. On the other hand, under s. 9 of the Companies (Profits) Surtax Act, 1964, penalty can be imposed only for failure to file the return and not for filing late. This is one aspect of the matter, where it seems the answer to the question is quite obvious.

6. On the other hand, the second aspect of the matter, namely, that the assessed had a reasonable cause for filing the return late which was rejected by the ITO, appears to have appealed to the Income-tax Appellate Tribunal. ON this point, the Tribunal observed in its substantive order as under :

"Incidentally it may be added that the assessed had already admittedly filed the income-tax return on September 30, 1969, and the calculation of the chargeable profits was to be only consequential to the figures shown in the income-tax return. Viewed from this angle, the explanation of the assessed that there was some confusion regarding the calculation of chargeable profits can be said to have some weight".

7. The Tribunal also took into view the third angle, which was as follows :

"From that angle also, a harsh penalty of Rs. 1,02,765 for a short delay of three months cannot be said to be leviable".

8. These two points seem to be questions of fact. In this connection, we would like to add that the income-tax assessment order has been filed before us. It shows that the assessed's income was assessed at a loss of Rs. 6,03,310 by the ITO. Against this order, the assessed appealed to the AAC for a further reduction from the income which led to further amount of Rs. 1,70,890 being reduced in the income. Consequently, the total loss assessed was Rs. 7,74,200. With such a loss, it would be reasonable for the assessed to think that no return had to be filed under the Surtax Act. This is the point which seems to have appealed to the Tribunal.

9. We are of the view, this case is concluded by a finding of fact and even otherwise, the question of law could only be academic in view of the fact that there is no provision in the Act for imposing a penalty in the case of a late return as found by the Calcutta High Court in the aforementioned judgment. The application is accordingly dismissed.


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