CIT Vs. MOTOR SALES LTD

JUDGEMENT

(1.) INCOME Tax Appellate Tribunal, Allahabad has referred the following two questions of law under section 256(1) of the Income Tax Act, 1961 (hereinafter referred to as the Act) for opinion to this Court: - ' 1. Whether in law and on facts of the case the ITAT was justified in confirming the CIT(A)'s order cancelling the penalty of Rs. 37,970 imposed under section 273(a) of the Income Tax Act, 1961, by the Income Tax Officer.

(2.) WHETHER in law and on the facts of the case the Tribunal was justified in holding that all payments within the financial year 1975 -76 should be taken into account for levy of penalty under section 273(a) even if they were made in pursuance of an invalid estimate filed on 15 -3 -1976.' 2. Briefly stated the facts giving rise to the present reference are as follows: The assessment year involved is 1976 -77. The respondent which is a public limited Co. was asked by the Income Tax Officer by way of notice dated 25 -4 -1975 for payment of advance tax of Rs. 3,79,701. The respondent filed its estimate on Form 29 on 8 -9 -1975 showing advance -tax payable at Rs. 3,45,000. Another estimate of advance -tax was filed on 15 -3 -1976 showing tax at Rs. 6,93,000. Since the estimate filed on 15 -3 -1976 was late it was treated as invalid and estimate filed on 8 -9 -1975 was taken into consideration at the time of the assessment. The income which was disclosed by the respondent at Rs. 17,04,5 80 was enhanced to Rs. 22,04,760 as a result of an order passed under section 273 of the Act by the Commissioner of Income Tax. The Income Tax Officer initiated proceedings for imposition of penalty under section 273(a) of the Income Tax Act on the ground that the respondent had filed statement of advance -tax payable by him which he had reason to believe to be untrue. As the tax paid by the respondent fell short of 75 per cent of the assessed tax, he imposed a sum of Rs. 37,970 as penalty. The respondent preferred appeal before the CIT(A) who deleted the penalty which order has been affirmed by the Tribunal.

(3.) FOR calculating the amount of tax paid during the year, the entire amount of advance - tax whether it has been paid in time or after the due date but not after the close of financial year has to be taken into consideration.