Law: Income Tax Act, 1961

Section: 256,256(2),271,271(2),271(1)(a),271(1)(1 )(b)

Income-tax-Reference---Penalty---Delay in filing returns---Registered firm---Advance tax paid in excess of assessed tax---Tribunal correct in holding that penalty could be levied on registered firm---No question of law arose---Indian Income Tax Act, 1961, Ss. 256(2) & 271. In CIT v. Bhabuti Contractor (1990) 183 ITR 445, the Madhya Pradesh High Court after reviewing all the cases including those of the Andhra Pradesh, Madras and Gauhati High Courts, and in view of decision of the Supreme Court, has categorically laid down that the intention of the Legislature is very clear that late filing of return will result in penalty irrespective of the fact whether the advance tax has been paid or not, specially with ,regard to registered firms. The ratio laid down in Bhabuti Contractor's case (1990) 183 ITR 445 (MP) was followed by the Madhya Pradesh High Court in the case of Dadariya Sales and Service v. CIT (1996) 217 ITR 604. The earlier s which are very exhaustive were not brought to the notice of their Lordships in the case of Ramlal Chiranjilal's case (1996) 220ITR 505 (MP). The case of CIT v. Bhabuti Contractor (1990) 183 ITR 445 lays down the proposition of law more exhaustively and holds the field: Held accordingly, dismissing the application for reference, that the Tribunal was right in law in holding that the assessee, a registered firm, was liable to penalty under section 271(1)(a) read with subsection (2) of section 271 of the Income Tax Act, 1961, in spite of the fact that the assessee had no "assessed tax" in terms of the Explanation to section 271(1)(i)(b)-of the Income-Tax Act, 1961, because the advance tax paid by it was in excess of the assessed tax: No question of law. arose from its order. CIT v. Bhabuti Contractor (1990) 183 ITR 445 (MP); CIT v. Chotelal Kanhaiyalal (1971) 80 ITR 656 (MP); CIT v. Ramlal Chiranjilal (1996) 220 ITR 505 (MP); Dadariy Sales and Service v. CIT (1996) 217 ITR 604 (MP) and Jain Brothers v. Union of India (1970) 77 ITR 107 (SC) ref. THIS JUDGMENT DELIVERED BY A.K. MATHUR, C.J.---This is an application under section 256(2) of the Income Tax Act, 1961, at the instance of the assessee for calling for the statement of the…

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