COMMISSIONER OF INCOME TAX Vs. PURE DRINKS LTD

JUDGEMENT

(1.) Following question of law has been referred for opinion of this Court by the Income Tax Appellate Tribunal, Chandigarh, arising out of its order dated 13.12.1994 in I.T.A. No. 397/89 for the assessment year 1984-85:

(2.) The Assessee was engaged in the business of manufacturing and bottling of soft drinks. It failed to deposit the entire amount of advance tax, on account of which, the Assessing Officer initiated proceedings under Section 140A of the Income Tax Act, 1961 (for short, "the Act") for levy of penalty. The defence of the Assessee was that default in making payment was on account of financial stringency due to destruction of equipments and material during riots in November, 1984. The Assessing Officer did not accept the explanation and imposed penalty @ 2% per month. The CIT(A) accepted the explanation of the Assessee for the period from 1.11.1984 to 25.2.1985 i.e. for about four months. On further appeals, by the revenue as well as by the Assessee, the Tribunal held that for the period from 1.11.1984 to 25.2.1985, for which relief was allowed by the CIT (A), penalty had not even been levied by the Assessing Officer. The Tribunal granted relief for the period from 25.2.1985 to 31.10.1985.

(3.) We have heard learned Counsel for the parties.