N. M. Kasliwal, J. - The Income-tax Appellate Tribunal, Jaipur Bench, has made this reference under section 256(1) of the Income-tax Act, 1961, (hereinafter referred to as the Act) and has referred the following question of law having arisen out of the consolidated order of the Income-tax Appellate Tribunal in I.T.A. Nos. 2833 and 2834 of 1970-71 dated May 4, 1972 :
'Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that penalty under section 271(1)(a) should be computed after taking into account all taxes paid by the assessee before the completion of assessment including taxes paid under section 141 and/or 140-A. ?'
M/s. Ambaviya Dahiya Adivasi Mazdoor Sahakari Samiti Ltd., Ambasa (hereinafter referred to as the assessment years 1960-61 and 1963-64, relying on the decision of the Mysore High Court in M. M. Annaiah v. CIT, Mysore : 76ITR582(KAR) and of the Calcutta High Court in CIT West Bengal-I v. Vegetable Ltd., Products (1970) 80 ITR 15 that the penalty leviable should be determined with reference to the net amount of the tax determined to be payable by the Assessee at the time of completion of the assessment, after deducting taxes already paid by the assessee upto that time by way of tax on self assessment, on provisional assessment by way of advance tax etc. The Tribunal placed reliance on the aforesaid two authorities and accepted the plea of the assessee and directed that the quantum of penalty for each of the assessment years should be determined with reference to the net amount of tax remaining payable by the assessee at the time of completion of the assessment, after deducting taxes already paid upto that time, by way of advance tax or self assessment, tax provisional assessment etc. There was no pronouncement by the High Court of Rajasthan or of the Supreme Court till October 7, 1972, the Tribunal referred the above question for the opinion of this Court.
2. Mr. Mehta, learned counsel for the Department, frankly and fairly pointed out that the above question has now been finally decided by their Lordships of the Supreme Court in Commissioner of Income-tax, West Bengal v. Vegetable Products Ltd., : 88ITR192(SC) . Their Lordships in the above case have already held :
'Tax payable is not the same thing as tax assessed. The tax payable is the amount for which a demand notice is issued u/s 156 of the Income-tax Act, 1961. In determining the tax payable, the tax already paid has to be deducted. Hence, the expression 'the amount of the tax if any, payable by him' in the earlier-part of Section 271(1)(a)(i) refers to the tax payable under a notice of demand. The words 'the tax' in the latter part of the provision can only refer to 'the tax', if any, payable' by the assessee mentioned in the earlier part of section 271(1)(a)(i) :
Held, accordingly, that in calculating the penalty leviable u/s 271(1)(a)(i) the Income-tax Act, 1961, for failure to file the return of income (for the assessment year 1960-61 within the time without reasonable cause, the amount paid by the assessee under provisional assessment under section 238 of the Indian Income-tax Act, 1922, had to be deducted from the amount of tax determined u/s 23(2) of that Act, in order to determine the amount of tax on which the computation of the penalty was to be based.
If the court finds that the language of a taxing provision is ambiguous or capable of more meanings than one, then the Court has to adopt that interpretation which favours the assessee, more particularly so where the provision relates to the imposition of penalty.'
The above question has therefore now been set at rest by the above decision of their Lordships of the Supreme Court and there does not remain any controversy for this court to decide the above legal question.
3. In the result the question referred to us is answered in the affirmative. As no body has appeared from the side of the assessee there will be no order as to costs.