Law:

Section:

Section 271(1)(a)(i) of the income-tax act, 1961-Penalty-For late filing of return-Assessment year 1968-69-Whether in view of amendment of section 271(1)(a)(i) by direct taxes (amendment) act, 1974, with retrospective effect from 1-4-1962, amount of tax paid by assessee as a consequence of provisional assessment cannot be deducted from 'assessed tax', for purposes of calculating amount of penalty payable by assessee under amended provisions of section 271(1)(a)(i)-Held, yes Facts For the assessment year 1968-69, the assessee, a registered partnership firm, was required to file return of its total income by 30-6-1968. The return was actually filed by the assessee on 13-3-1969, after a delay of over 8 months. The assessee had paid a sum of Rs. 4,475 as advance tax under section 210. After the provisional assessment was completed on the basis of the return filed, the assessee further paid a sum of Rs. 1,306 under section 141 and thus a total sum of Rs. 5,781 was paid by the assessee towards the tax payable by him for the aforesaid assessment year. After regular assessment proceedings, the ITO determined the gross tax payable by the assessee at Rs. 5,221. As more than the aforesaid sum had already been paid by the assessee, no amount was payable by way of tax at the time when the regular assessment took place and the stage of issuing a demand notice was reached. As the return was filed by the assessee after a delay of 8 months, a notice to show cause as to why penalty should not be imposed upon him under section 271(1)(a) was issued. The only explanation furnished by the assessee was that the entire amount due on account of tax had already been paid before the assessment proceedings were completed and as such no penalty could be imposed under section 271(1)(a)( i). The ITO did not accept the contention and held that as the return was not filed within the time allowed under section 139(1), penalty under section 271(1)(a) was attracted. On appeal, the AAC upheld the ITO's order. On further appeal, the Tribunal following the decision of the Supreme Court in CIT v. Vegetable Products Ltd. [1973] 88 ITR 192 held that the 'tax payable' for purposes of determination of…

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