COMMISSIONER OF INCOME TAX Vs. CAPITAL ELECTRONICS GARIAHAT

JUDGEMENT

(1.) The question referred to this court for answer is as follows :

(2.) Mr. Mihir Lal Bhattacharjee, learned senior counsel for the assessee, had pointed out that though the learned Tribunal had rejected the assessee's explanation with regard to the reasonable cause for default contemplated under Section 271B in respect of furnishing the audited accounts required under Section 44AB, it is a quasi-criminal matter as was held in the case of CIT v. Anwar Ali, therefore, according to him, the default does not automatically attract the mischief of penalty in view of the changed proposition of law now prevailing and accepted by the Supreme Court and various other High Courts. He relied on the decisions in CIT v. ASK Enterprises [1998] 230 ITR 48 (Bom); CIT v. Vegetable Products Ltd. ; Calcom Electronics ltd. v. Sales Tax Officer [2001] 121 STC 600 (Delhi) ; Mysore Minerals Ltd. v. CIT ; Rupa Ashok Hurra v. Ashok Hurra ; CIT v. Jai Durga Construction Co. and Cemento Corporation Ltd. v. CCE. Relying on these decisions, he contended that the expression "may" employed in Section 271B is not mandatory but discretionary. It is not an absolute proposition that rejection of reasonable cause would definitely result in the imposition of penalty. According to him, by reason of Section 273B, the Legislature had intended that the imposition of penalty would not be an absolute proposition.

(3.) Mr. Dipak Deb, learned counsel appearing on behalf of the Department, on the other hand, contends that the statute has to be interpreted in the manner it has expressed its intention. Neither the Tribunal nor the court can interpret an enactment in a manner different from the way it is expressed by the Legislature through express language "employed" therein. According to him, once the explanation is rejected, in a reference, there is no scope for interfering with the same and then there is no discretion left with the authority but to impose penalty. The absence of absolute default is something, which cannot be reconciled with the provisions of the statute. In order to show that once there is a default, the imposition of penalty is inevitable, he relied on the decisions in CIT (Addl.) v. Jeevan Lal Sah ; CIT v. Mussadilal Ram Bharose ; CIT v. K. R. Sadayappan ; B. A. Balasubramaniam and Bros. Co. v. CIT ; Maya Rani Punj v. CIT ; CIT v. Kil Kotagiri Tea and Coffee Estates Ltd. [1989] 177 ITR 458 (Ker) and CIT v. Ramkrishna Stores and on a passage from the Income-tax Law by Chaturvedi and Pithisaria, fifth edition, page 8663.