1993 (10) TMI 119 - AT - Income Tax

Appeal granted for penalty under Gift-tax Act, reassessment directed for credit consideration.

Bireswar Mukherjee. Versus Gift-Tax Officer

The Tribunal partially allowed the appeal by an individual assessee against the penalty imposed under section 17(1)(a) of the Gift-tax Act for default in ... Penalty, Rebate, For Late Filing Of Return Issues:1. Penalty under section 17(1)(a) of the Gift-tax Act for default in filing the return.2. Claim of rebate of advance-tax under section 18 of the Act.3. Imposition of penalty by the Assessing Officer and rejection of contentions by Dy. CGT(A).4. Reasonableness of the cause of delay in filing the Gift-tax Return.5. Interpretation of section 18 of the Gift-tax Act regarding rebate on advance payment.6. Calculation of penalty under section 17(1)(a) based on the assessed tax and credit allowed under section 18.Detailed Analysis:1. The case involved an appeal by an individual assessee against the penalty imposed by the Assessing Officer under section 17(1)(a) of the Gift-tax Act for default in filing the Gift-tax Return. The penalty was levied at 2% of the assessed tax for a delay of 24 months. The assessee contended that the penalty should not apply due to various reasons, including the non-availability of the return form. The Dy. CGT(A) upheld the penalty, leading to the appeal before the Tribunal.2. The assessee claimed a rebate of advance-tax under section 18 of the Act, arguing that it should have been considered before imposing the penalty. The Dy. CGT(A) rejected this contention, stating that the advance-tax was not paid within the stipulated period from the date of making the taxable gift. The Tribunal analyzed the provisions of section 18 and concluded that while the rebate under section 18(i) may not apply, the credit for the actual tax paid should be allowed.3. The Tribunal considered the reasonableness of the delay in filing the Gift-tax Return and found that the assessee had not provided sufficient evidence of the non-availability of the return form. As the responsibility of obtaining the form rested with the assessee, the Tribunal upheld the penalty on this ground.4. Regarding the interpretation of section 18 of the Gift-tax Act, the Tribunal clarified that the rebate under section 18 is primarily for encouraging prompt tax payments and timely reporting of gifts. While the rebate of 1/9th of the amount paid may not apply in certain cases, the credit for the actual tax paid should be allowed.5. The Tribunal delved into the calculation of penalty under section 17(1)(a) based on the assessed tax and the credit allowed under section 18. It emphasized that the penalty should be computed on the net amount payable after considering the credit for tax paid by the assessee. The Tribunal directed the assessing officer to recompute the penalty based on the net tax payable as determined in the assessment order.6. In conclusion, the Tribunal partially allowed the appeal, considering the various factors related to the penalty, rebate of advance-tax, and the interpretation of relevant provisions of the Gift-tax Act. The decision highlighted the importance of timely compliance and the allowance of credit for tax payments made by the assessee.