High Court Of Gujarat
CIT vs. Natverlal Jivanlal
Section 271(1)(a), 271(2)
Asst. Year 1981-82
M.S. Shah & K.A. Puj, JJ.
IT Ref. No. 6 of 1993
17th July, 2002
Counsel Appeared :
Manish R. Bhatt, for the Petitioner : None, for the Respondent
JUDGMENT
K.A. PUJ, J. :
At the instance of the Revenue, the following question of law is referred to this Court for its opinion :
“Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that no penalty under s. 271(1)(a) could be levied against the registered firm for delay in filing the return when the advance tax paid by the firm exceeded the assessed tax payable by the firm and the assessment resulted in refund ?”
The assessment year involved is asst. yr. 1981-82. Heard Mr. M.R. Bhatt, learned standing counsel for the Revenue. No one appears on behalf of the respondent-assessee though notice was duly served. At the time of hearing of this reference. Mr. Bhatt has invited our attention to the decision of this Court in the IT Ref. No. 34 of 1986, in the case of CIT vs. Textile and General Engineer Co. [reported at (2002) 178 CTR (Guj) 539—Ed]. The Revenue has raised four questions in that reference and the question No. 2 which was referred to was more or less similar to the question which is referred to this Court in the present reference.
This Court was called upon to decide as to whether the finding of the Tribunal that on completion of assessment in the status of registered firm the assessee was entitled to a refund and hence no penalty was leviable, is correct in law ? While dealing with this question, this Court has referred to the decision of CIT vs. Damjibhai & Bros. 1976 CTR (Guj) 23 and CIT vs. Jasbhai Motibhai & Co. (IT Ref. No. 205 of 1975, decided on 26th Feb., 1979). Following the ratio laid down by this Court in these two decisions, this Court has taken the view that the Tribunal was not justified in holding that merely because on completion of assessment of the assessee in status of a registered firm a refund was due to the assessee, no penalty was leviable. While answering the said question in favour of the Revenue and against the assessee, this Court has also observed that the assessee-firm would incur a liability provided there is no reasonable cause which prevented it from filing the return in time. Following the aforesaid decisions of this Court, we are of the view that the Tribunal was not right in confirming the view in deleting the penalty imposed by the ITO under s. 271(1)(a) of the IT Act, 1961. We, therefore, answer the question in negative i.e., in favour of the Revenue and against the assessee.
Before parting, however, we are of the view that the question will remain as to whether assessee was prevented by reasonable cause from filing a return of income in time. This issue is not decided by the Tribunal and no material is available before us to decide the said issue in this reference. We, therefore, direct the Tribunal to decide this issue while giving effect to the order of this Court in the present reference by passing under s. 260(1) of the Act after giving necessary opportunity of hearing to the parties and give appropriate decision. With these observations, the reference is accordingly disposed of with no order as to costs.
[Citation : 259 ITR 739]
