TaxTMI 
TaxTMI 
1982 (7) TMI 174
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....the filing of the returns were 23rd February, 1978 in the case of Shri Uttam Chand Kankariya, 29th September, 1976 (assessment year 1976-77) in the case of Shri Gyanchand Kankariya, 21st February, 1978 (assessment year 1977-78) in the case of Shri Gyan Chand Kankariya and 23rd February, 1978 in the case of Smt. Urmila Kankariya. The date of assessments were 14th February, 1980, 15th January, 1979, 31st December, 1979 and 31st December, 1979 respectively. According to the ITO, the delay in the payment of taxes were 34 months, 51 months, 34 months and 35 months in the cases of Shri Uttam Chand Kankariya, Shri Gyan Chand Kankariya and Smt. Urmila Kankariya respectively because he was of the view that the delay had to be taken note of upto the ....
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....penalties were not exigible on facts. Reliance was placed on [1982] 28 CTR 85 (Delhi), a judgment of their Lordships of the Delhi Court. The Departmental Rep on the other hand contended that mere paucity of funds was no excuse in view of [1977] 108 ITR 305 (Gau.), a judgment of their Lordships of the Gauhati High Court. We will deal this contention at the last. The third contention raised by the learned counsel for the assessee is that the provisions of section 140A is ultra vires in view of [1973] 90 ITR 116 (Mad.) and [1978] 113 ITR 589 (Bom.). This contention also, we will not advert to or deal with because the Tribunal being a creature of the Act, is not competent to determine the vires of the section (1966) 60 ITR 112 (SC). The fourth ....
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....hich according to his way of thinking is genuine. It may be totally wrong but as long as that belief is honest, howsoever wrong it may be, remains a bona fide belief. Therefore, the bona fide belief can be a reasonable cause or can constitute a circumstance which may mitigate the offence of non-payment of taxes to a very large extent. The other circumstances which have been mentioned in respect of Shri Gyan Chand Kankariya is that his wife was suffering from T.B. and father was a heart patient which is not the case in the other two cases of Shri Uttam Chand Kankariya and Smt. Urmila Kankariya. 4. The last contention raises was that the taxes had been paid before the date of the imposition of the penalties, the penalties should not have b....
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.... is not legally bound to levy the penalty in all cases without considering the reasons given by the assessee for non-payment of tax within the prescribed period. Before the ITO levies penalty the assessee is entitled to a notice to that effect and, if he so desires, he should be heard also. Therefore, the ITO has duty cast upon him by section140A to consider the reasons, if any, given by the assessee for non-payment of taxes within the prescribed period and if the reasons are not considered the ITO's order may be bad." They held in the instant case by their judgment that the penalty as imposed, was justified. Now what are the circumstances before us. They are: the bona fide belief of the assessee in respect of the vires of this section, ....
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.... that the ITO has to apply his mind and find for himself whether in view of the totality of the circumstances, the penalty should be imposed or not. If he comes to the view that the penalty may be imposed, he has to so direct. When an authority competent to issue directions, applies its mind to direct, he has got to evolve within himself once again whether the directions will lead to the administration of justice or defeat the goal of substantial justice. As the penalty under section 140A(3) is not automatic, it has got to be levied judiciously objectively without lending towards technicalities. If mere technicalities are adhered to in the administration of law, the law may be administered but the justice may be defeated and that is not the....