ADDITIONAL COMMISSIONER OF INCOME TAX Vs. KHAYAM CONSTRUCTIONS

JUDGEMENT

(1.) PURSUANT to the direction given by this court under Section 256(2) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), the Income-tax Appellate Tribunal, Hyderabad Bench, has submitted a statement of case for the opinion of this court on the following question of law :

(2.) THE assessee had entered into a contract with the Reserve Bank of India for a sum of about Rs. 5 lakhs on March 27, 1967, for the construction of a building for it at Hyderabad. THE assessee did not furnish the particulars as per the provisions of Section 285A(1) read with Rule 120 of the I.T. Rules. THE Commissioner initiated proceedings for the levy of fine under Section 285A(2) and issued a show-cause notice to the respondent-assessee as to why he should not be proceeded against under Section 285A(2). THE assessee made oral submissions through its advocate and also filed written explanation to the effect that the omission to furnish the particulars as required under Section 285A(1) read with Rule 120 of the I.T. Rules on its part was bona fide since the provision of law was new. THE Commissioner by his order dated January 6, 1970, held that the assessee had submitted such particulars earlier in respect of certain contracts in the prescribed form in the year 1969, and therefore it is not correct to state that the assessee was not familiar with the procedure in this regard. ' However, he has found that " this is the first omission or default on the part of the assessee " and that " there is also nothing to establish that the omission was deliberate or mala fide ". Taking an overall view of the facts and circumstances, the Commissioner levied a fine of Rs. 20 per day of default from April 27, 1967, to August 6, 1969, on which date the assessee filed a return of income for the assessment year 1969-70, wherein the income received from the contract was shown. THE quantum of fine imposed worked out to Rs. 16,660, which wasdirected to be collected by the issue of a demand notice by the concerned ITO.

(3.) SRI P. Rama Rao, the learned counsel for the revenue, contended that the Tribunal erred in law in holding that fine imposable under Section 285A(2) of the Act is quasi-criminal in character and it cannot be levied unless the department establishes criminal intent or contumacious conduct or deliberate intention on the part of the assessee not to furnish the particulars as required under Section 285A(1) and no mens rea is needed to levy fine for default committed under Section 285A(1) and the view taken by the Tribunal is contrary to the provisions of Section 285A. This claim of the department is resisted by Mr. Y. V. Anjaneyulu, learned counsel for the respondent-assessee, contending inter alia that in the present case, as the Commissioner himself has found that the omission or default on the part of the assessee is the first of its kind and it was neither deliberate nor mala fide, this is not a fit case where fine is leviable under Section 285A(2).