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Issues: Whether penalty for failure to make compulsory deposit under the Compulsory Deposit Scheme was leviable where the deposit, though made after the due date, was made within the relevant financial year and the default was explained as having occurred on wrong professional advice.
Analysis: The time for making compulsory deposit under the scheme was read as analogous to the timetable for advance tax under section 211 of the Income-tax Act, 1961. On that construction, a deposit made after the due date but within the financial year was treated as falling within the statutory time limit. The amendment to the penalty provision, which introduced the expression "without reasonable cause", showed that relief was intended where genuine hardship existed. Wrong advice of counsel was accepted as a reasonable cause for the delayed deposit.
Conclusion: Penalty was not exigible and the deletion of the penalty by the appellate authority was upheld in favour of the assessee.
Ratio Decidendi: Where the compulsory deposit is made within the financial year and the delay is attributable to reasonable cause, including bona fide wrong advice of counsel, penalty under the scheme is not leviable.
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