Commissioner of Income Tax vs Ragisthan Private Ltd.

This application u/s 256(2) of the Income Tax Act is in respect of assessment year 1978-79 with a prayer that the following questions of law arise in this matter and the Income Tax Tribunal be directed to submit statement of the case:

(1) Whether on the facts and in the circumstances of the case the Tribunal was justified in holding that assessee had reasonable cause for not filing the estimate of advance tax as per provisions of Section 212(3) of the Income Tax Act?

(2) Whether on the facts and in the circumstances of the case the Tribunal was justified in quashing the penalty imposed u/s 273(1)(b) of the Act?

Sole argument of the learned Counsel for the Revenue is that the assessee had filed return for the first time, therefore, the proviso appended to Sub-section (3)(a) of Section 212 of the Income Tax Act would not be applicable for extension of time. He has also placed reliance on a judgment delivered by the Division Bench of Madhya Pradesh High Court in case title Surendra Mirani and Bros. Vs. Commissioner of Income Tax, and contended that penalty has been provided u/s 273(b) of the Income Tax Act, 1961 for non-compliance. Section 212(3) contemplates two things: filing of estimate of advance tax by a person who has not previously been assessed and payment of advance tax. It is clear from the language of Section 273(b) read with Section 212(3) that the penalty provision is attracted if there has been a failure to file the estimated advance tax. However, since penalty can be imposed for both failure to file estimate of advance tax and to pay advance tax, therefore, it is necessary for the Income Tax Officer to consider the question of imposition of penalty after taking into account the advance tax, if any, deposited by the assessee.

However, it is to be seen from the order dated 14-11-1988 passed by the Income Tax Appellate Tribunal, Jaipur Bench, Jaipur in ITA No. 362/Jp./1987 for the assessment year 1978-79 that the assessee has earlier also filed the return and it is not for the first time, as argued. The Tribunal has categorically recorded the findings in this regard which read as under:

In this connection, the learned Departmental Representative submitted that the assessee-company though had filed the return for assessment year 1975-76, the assessment having been concluded only on 20-7-1978 it became an assessee only from that date as far as provisions of Income Tax are concerned and since the accounting year of the assessee ended on 31-12-1977, the assessee could not have been treated as an existing assessee at all.

These findings clearly establish that the assessee had already filed returns for the earlier assessment years as well. If that be so, the proviso appended to Sub-section (3)(a) of Section 212 of the Income Tax Act, 1961 would be applicable to the facts of the case. In light of the aforesaid discussion, we are of the opinion that no question of law as mentioned hereinabove would arise to be referred by the Tribunal for sending the statement of the case. The application calls for no interference, therefore, stands rejected.