Punjab & Haryana H.C : Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the non-filing of an estimate u/s. 212(3A)of the IT Act, 1961, by the firm would constitute a sufficient cause within the meaning of s. 273(c) of the IT Act, 1961, for non-filing an estimate under/s. 212(3A) of the Act by the partners ?

High Court Of Punjab & Haryana

CIT vs. Smt. Parvati Devi & Ors.

Section 273(c)

Asst. Year 1970-71

Prem Chand Jain & D.S. Tewatia, JJ.

IT Case No. 107 of 1976

25th November, 1982

Counsel Appeared

Ashok Bhan with Ajay Mittal, for the Petitioner : Bhagirath Dass Seth with K.D. Singh, for the Respondents

D.S. TEWATIA, J. :

The Revenue has sought a direction to the Tribunal to refer the following two questions for our decision that are claimed to arise from its decision dated 21st November, 1975, in I.T.A.No. 248 (ASR) of 1975-76, asst. yr. 1970- 71:

“1. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the non-filing of an estimate u/s. 212(3A)of the IT Act, 1961, by the firm would constitute a sufficient cause within the meaning of s. 273(c) of the IT Act, 1961, for non-filing an estimate under/s. 212(3A) of the Act by the partners ?

2. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that when a firm has been penalised under/s. 273(c) of the IT Act, 1961, no penalty can be imposed under the said section on its partners?” Question No. 1, it may be observed, has to be considered in the light of the facts which are not in dispute and can be stated thus :

The firm had not filed an estimate of its income under s. 212(3A) of the IT Act, 1961 (hereinafter referred to as “the Act”). The assessee, a partner of the said firm, who had derived her entire income from the said firm, too did not file her estimate of the income under the said section. Penal action against the assessee was initiated under s. 273(c) of the Act for not filing the return under s. 212(3A) of the Act.

The Tribunal in substance took the view that if for example A’s entire income is what he only gets from B and B itself does not know its own income by a certain date by which both B and A are required to file estimates of their own respective income under s. 212(3A) of the Act, then B’s not knowing its own income would furnish a sufficient cause for A also not knowing his own income and thus being genuinely not able to estimate it and disclose it to the taxing authorities in terms of the said provisions. On the material before it, the Tribunal was satisfied that the firm had, in fact, not estimated its own income by the relevant date.

We entirely concur in the view which the Tribunal has taken that ignorance on the part of the said firm of its own income constituted a reasonable excuse on the part of its assessee-partner who derived her entire income from the said firm within the meaning of the expression occurring in s. 273(c) of the Act and, therefore, it rightly cancelled the penalty imposed upon the respondentassessee.

As a result of the aforesaid discussion, we find that no case is made out for directing the Tribunal to draw up a case and refer the questions posed in the petition by the Revenue for the decision of this Court.

In view of the above, the petition is dismissed but with no order as to costs.

[Citation : 141 ITR 738]

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