Law:

Section:

Section 271(1)(a) of the Income-tax Act, 1961, read with paragraph 17 of the Dadra and Nagar Haveli and Goa, Daman and Diu (Taxation Concessions) order, 1964 - Penalty - For late filing of return - Whether concession contemplated in paragraph 17 of the above-mentioned order is available only in respect of penalty imposable on income arising in an erstwhile Portuguese territory only and not in respect of penalty on income arising in india - Held, no Facts The assessee was a resident of the erstwhile Portuguese territory. Daman. For the assessment year 1963-64, he was assessed on income arising in both Daman- and Bombay. Since the assessee had not filed a return of income under section 139(1), the ITO imposed a penalty under section 271(1)(a) which was upheld by the AAC in principle. On second appeal, the Tribunal accepted the assessee's contention that the assessee's case was covered by paragraph 17 of the Dadra and Nagar Haveli, and Goa, Daman and Diu (Taxation Concessions) Order, 1964, so that it was not necessary to impose the minimum penalty. Eventually, the Tribunal imposed only a small token penalty. On reference, the revenue's contention was that the aforesaid paragraph 17 applied only to penalty in respect of income earned or accrued in the erstwhile Portuguese territory and not the income accrued in India. Held Para 17 of the aforementioned Taxation Concessions Order points out that in the case of an assessee referred to in para 3(1)( a) or para 3(1)( ii), the relevant authorities could impose a penalty which was less than the minimum amount specified in any provision of Chapter XXI. It was clear from the material on record as well as from the of this High Court in the quantum-reference that the assessee was one of the persons covered by paragraph 3( 1)(ii). Consequently, the relaxation contemplated in paragraph 17 was available to the assessee. It was not possible to accept the revenue's contention that the relaxation contemplated in paragraph 17 was available in respect of penalty imposable on income arising in the erstwhile Portuguese territory only and not in respect of the penalty on income arising in India. Although, clear words conforming such…

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