2000 (9) TMI 60

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....he following question, in each case, pertaining to the assessment year 1966-67, for the opinion of this court : "Whether, on the facts and in the circumstances of the case, was the Tribunal right in cancelling the penalty levied under section 140A(3)?" The background facts, which are almost undisputed, are as follows : For the assessment year 1966-67, the assessees, i.e., M. L. Narang and O. P. Narang, who were partners in the firm, Narang and Co., submitted their returns of income. As admitted income-tax in terms of section 140A was not paid in each of the cases, notices were issued to the respective assessees to show cause why penal action as contemplated under section 140A(3) should not be taken. The matter was adjourned from ti....

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....was due there is no scope for imposition of any penalty under section 140A. It was noticed that the tax in fact was paid on April 29, 1972. Reference applications filed were turned down. But pursuant to directions given by this court the question as stated above has been referred for opinion. We have heard learned counsel for the Revenue. There is no appearance for the assessees in spite of service of notices. Section 140A was inserted by section 34 of the Finance Act, 1964. The section at the relevant time read as follows : "140A. Self-assessment.---(1) Where a return has been furnished under section 139 and the tax payable on the basis of that return as reduced by any tax already paid under any provision of this Act exceeds five ....

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....nt within the stipulated time. For this purpose, an opportunity is granted to the assessee to place materials to substantiate the reasons for the delay in payment of the admitted tax, if any. This is clear from a proviso to section 140A. Prior to the amendment by the Taxation Laws (Amendment) Act, 1975, an assessee could file its return and then calculate the tax payable in accordance therewith. If he finds that such tax was in excess of Rs. 500, he was allowed to pay the same within thirty days of furnishing the return. The substitution made with effect from April 1, 1976, operative till March 31, 1989, required payment of tax before filing the return, as proof of payment of tax was required to be attached to the return itself. Payment ....