2005 (3) TMI 28

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....red firm where the advance-tax paid exceeded the tax assessed on it as a registered firm even though as an unregistered firm the tax payable would be more than the advance-tax?" The reference relates to the assessment year 1983-84. The income-tax return for the assessment year 1983-84 was due on July 31, 1983 as the accounting period ended on March 31, 1983. It was filed on November 19, 1985, and was late by more than 27 months. The Income-tax Officer initiated penalty proceedings under section 271(1)(a) of the Act for late filing of the return of income. A written reply was filed to the show-cause notice. Penalty was imposed to the tune of Rs. 2,955 and while calculating the penalty the assessed tax was determined by treating the assess....

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....es imposition of penalty for failure to file the return of total income or delayed filing of return without reasonable cause, and also for failure to file it in the manner and within the time required. The parameter for levy of penalty is the period of delay, viz., default in filing the return of total income without reasonable cause. Section 271(1) (a)(i)(b) of the Act prescribes the manner for calculation of the penalty. It says that in addition to the amount of tax, if any, payable by the assessee, a sum equal to 2 per cent, of the assessed tax for every month during which the default continued is leviable as penalty. The combined reading of section 271(1)(a) with section 271(2) and section 271(1)(a)(i)(b) is that the imposition of penal....

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....rt has followed the judgment of the Madhya Pradesh High Court delivered in Delux Publishing Co. v. Addl CIT [1981] 127 ITR 782. The following paragraph of the Madhya Pradesh High Court is quoted therein: "By section 271(2) of the Act a fiction is created and even if the person liable to penalty is a registered firm, the penalty imposable under section 271 of the Act shall be the same amount as would be imposable on that firm if that firm were an unregistered firm. Therefore, in the case of a registered firm the tax assessable has to be worked out as if it were an unregistered firm and on that basis the penalty has to be calculated because the fiction created has to be carried to its logical extent .... In our opinion in cases covered by ....