Rajasthan H.C : Whether, on the facts and in the circumstances of the case, the Tribunal was justified in cancelling the penalty of Rs. 11,000 levied under s. 273(c) of the Act ?

High Court Of Rajasthan

CIT vs. Roshanlal Kasliwal

Sections 256(2), 273(c)

Asst. Year 1975-76

M.B. Sharma & I.S. Israni, JJ.

IT Ref. Appln. No. 71 of 1984

14th August, 1986

Counsel Appeared

R.N. Surolia, for the Revenue : G.S. Bafna, for the Assessee

BY THE COURT :

This is an application under s. 256(1) of the IT Act, 1961 (in short ” the Act “), filed by the Revenue, wherein it has been prayed that the following question of law arises in the case and the Tribunal be directed to draw up a statement of case:

” Whether, on the facts and in the circumstances of the case, the Tribunal was justified in cancelling the penalty of Rs. 11,000 levied under s. 273(c) of the Act ? “

2. Notice of demand for payment of advance tax of Rs. 31,466 was issued to the assessee. The assessee filed a return declaring an income of Rs. 2,36,280 and the assessment was completed on an income of Rs. 2,76,600 (after appeal effect). The tax on the income comes to Rs. 1,89,585. Since the tax levied on the basis of the returned income exceeded the tax demanded by 1/3rd of the latter amount, the assessee was required to file an estimate and pay advance tax and a notice under s. 274 of the Act requesting the assessee to show cause as to why penalty should not be imposed, was issued and served on the assessee. A fresh opportunity was also offered and the assessee in his reply furnished the following explanation : ” Assesee’s major source of income is share income from Jem Palace, Jaipur. The reasons which prevented the firm from filing estimate are applicable in the instant case also, the assessee, being a partner, and the reasons in the case of the firm having a direct bearing on the partners as well.

3. A penalty of Rs. 33,700 under s. 273(c) was levied in the case of the firm for the asst. yr. 197576. The hon’ble CIT (appeal) after appreciating the reasonable cause which prevented the firm from filing an estimate accepted the same and cancelled the penalty levied on the firm in Appeal No. 308 of 1977-78, vide order dated October 26, 1978. Since the reasons for not filing any estimate in the assessee’s case are the same it is requested that no penalty under s. 273(c) be levied on the assessee.”

The ITO did not accept the explanation furnished by the assessee and by his order dated March 12, 1980, imposed penalty of Rs. 11,000. The assessee perferred an appeal before the CIT (Appeals), Rajasthan-I, Jaipur, and the appellate authority by its order dated October 24, 1980 (annexure 2), allowed the appeal and the explanation furnished by the assessee was accepted. The penalty levied by the ITO was set aside. The Revenue preferred an appeal before the Tribunal, Jaipur, and the Tribunal, Calcutta Bench ” D “, camp at Jaipur, by its order dated July 13, 1981, dismissed the appeal. An application was filed on behalf of the Revenue before the Tribunal to make a reference to this Court. The Tribunal, by its order dated May 29, 1982, refused to make a reference, as in its opinion the question as to whether the explanation furnished by the assessee is correct or not, is purely a question of fact and no question of law arises out of the order of the Tribunal.

We have heard Mr. R. N. Surolia, learned counsel for the Revenue, and Mr. G. S. Bafna, learned counsel for the assessee.

Mr. Surolia, learned counsel for the Revenue, has no quarrel with the proposition, as to whether the explanation furnished by the assessee for not paying the advance tax is correct or not, is purely a question of fact. This submission is that the finding of the Tribunal that the explanation furnished by the assessee that because of the search having been conducted on November 19, 1974, he could not deposit the advance tax up to the last day when the instalment was due, is perverse. We are unable to agree with Mr. Surolia. It is not disputed that a search was conducted on the business premises on November 19, 1974, and the advance tax could not have been deposited by December 14, 1974.

In these circumstances, we are in agreement with the Tribunal that no question of law arises out of the order of the Tribunal. The reference application is, therefore, dismissed.

There will be no order as to costs.

[Citation : 170 ITR 646]

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