S.C : Whether when the AO as well as the CIT(A) had given a categorical finding that the assessee had acted in conscious disregard of its statutory obligation with a view to reduce the quantum of its legitimate and proper advance tax liability, the Tribunal was right in law and on fact in holding that this was not a fit case for levy of penalty under s. 273(2)(a) of the IT Act, 1961 ?

Supreme Court Of India

CIT vs. Gujarat Alkalies & Chemicals Ltd.

Sections 256(2), 273(2)(a)

M. Srinivasan & U.C. Banerjee, JJ.

Civil Appeal No. 1858 of 1994

17th February, 1999

ORDER

BY THE COURT :

The Revenue is aggrieved by the judgment of the High Court which confirmed the view taken by the Tribunal in this matter. The only question that was sought to be referred to the High Court by the Revenue was as follows :

“Whether when the AO as well as the CIT(A) had given a categorical finding that the assessee had acted in conscious disregard of its statutory obligation with a view to reduce the quantum of its legitimate and proper advance tax liability, the Tribunal was right in law and on fact in holding that this was not a fit case for levy of penalty under s. 273(2)(a) of the IT Act, 1961 ?”

The Tribunal rejected the application of the Revenue for reference on the ground that the facts found by the Tribunal did not give rise to the question of law raised by the Revenue. That view was affirmed by the High Court and thus there was no reference to the High Court. It is seen that the Tribunal has found, on the facts, that the figures submitted by the assessee were on an honest belief of the estimate made by it pursuant to the position in law as it was understood at that time by the decisions of the Court. Hence, the fact that the estimated income returned by the assessee for the purpose of advance tax was less than the annual income would not bring the assessee within the ambit of s. 273(2)(a) of the IT Act. The view expressed by the Tribunal on such factual conclusions is unassailable and the High Court did not commit any error in refusing to call for a reference. The appeal fails and is accordingly dismissed. No order as to costs.

[Citation : 246 ITR 462]

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