COMMISSIONER OF INCOME TAX Vs. JINDAL BROTHERS

JUDGEMENT

(1.) In these references under Section 256(1) of the Income-tax Act, 1961, at the instance of the Revenue, a common question of law has been referred to this court for opinion. The question of law, as framed by the Tribunal, is :

(2.) The material facts are as follows : The assessee is a registered firm. It filed returns of income for the assessment years 1973-74 to 1976-77 on July 28, 1977, as against the due dates being June 30, 1973, for the assessment year 1973-74, June 30, 1974, for the assessment year 1974-75, June 30, 1975, for the assessment year 1975-76 and June 30, 1976, for the assessment year 1976-77. The Income-tax Officer in the course of assessment proceedings initiated penalty proceedings for late filing of the returns. The assessee submitted an explanation to the effect that the delay was on account of non-finalisation of the accounts by the accountant. The explanation was not accepted by the Income-tax Officer, who imposed penalty under Section 271(1)(a) amounting to Rs. 3,108, Rs. 190, Rs. 832, and Rs. 4,990 for the assessment years in question, respectively. The Appellate Assistant Commissioner on appeal preferred by the assessee took the view that since the tax assessed was less than the tax paid by way of advance tax and upon completion of assessment refund had also been granted by the Income-tax Officer, no penalty under Section 271(1)(a)(i) could be imposed. The Appellate Assistant Commissioner also accepted the case of the assessee regarding late filing of the returns on facts. He, accordingly, cancelled the penalties.'' It was the turn of the Revenue to go in appeal before the Income-tax Appel-late Tribunal. The Tribunal, following the decisions of the Madras High Court in Addl. CIT v. Murugan Timber Depot [1978] 113 ITR 99 and CIT v. Fomra Bros. [1980] 122 ITR 312 and a decision of the Gauhati High Court in CIT v. Maskara TEA Estate [1981] 130 ITR 955, held that where no tax is found payable, as a result of the assessment against a registered firm, there is no question of imposing any penalty under Section 271(1)(a) of the Act for non-filing or late filing of the returns, and, accordingly, upheld the first appellate order of the Appellate Assistant Commissioner.

(3.) Upon an application under Section 256(1) of the Income-tax Act, however, the Tribunal made the reference of the aforestated question to this court for its opinion.