COMMISSIONER OF INCOME TAX Vs. VARINDER KUMAR

JUDGEMENT

(1.) THIS judgment will dispose of two cases, Income-tax References Nos. 29 and 30 of 1977, which involve a common question of law. For the purpose of this judgment, the facts of Income-tax Reference No. 29 of 1977 have been noticed.

(2.) A penalty of Rs. 4,665 was imposed by the Income-tax Officer on the assessee under Section 271(1)(a) of the Income-tax Act for not filing the return in response to the notice issued under Section 139(2) within the period allowed. The amount of penalty was reduced on appeal by the Appellate Assistant Commissioner to Rs. 1,555. Before the Tribunal, apart from urging that there was a reasonable excuse for the late filing of the return, the assessee also contended that in addition to the payment of Rs, 1,308 as advance tax, he had also paid a sum of Rs. 8,500 as tax under Section 141 of the Income-tax Act and, as such, the penalty could be imposed, if at all, only on the balance amount of Rs. 3,606 which was payable by him. The plea of reasonable excuse was turned down but the latter contention was upheld by the Tribunal and the penalty was ordered to be imposed at the rate of two per cent. per month on the sum of Rs. 3,606. The Revenue, dissatisfied with this order, got the following question referred for the opinion of this court: