2009 (5) TMI 11

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....ills (assessee) had challenged the validity of Rule 96ZQ(5)(ii), which reads as under: "Rule 96ZQ(5)(ii): (5) If an independent processor fails to pay the amountof duty by the date specified in sub-rule (3) he shall be liable to:- (i)...... (ii) a penalty equal to an amount of duty outstanding from him at the end of such month or rupees five thousand, whichever is greater." 2. As can be seen from the above quoted impugned sub-rule, penalty equal to an amount outstanding at the end of the stipulated period was leviable. The impugned Rule was challenged as ultra vires the Constitution and beyond the legislative competence of the Rule making authority. By judgment in the case of Ambuja Synsthetic Mills Vs. Union of India reported i....

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....y the maximum amount which would be levied and the assessing authority has the discretion to levy lesser amount depending upon the facts and circumstances of each case. Construing Section 7(5) in this manner, the Apex Court pointed out that the decision of the High Court that Section 7(5) is ultra vires cannot be sustained.  Applying this analogy in the instant case also, it is difficult to accept the contention raised by the petitioner that the said Rule is ultra vires. However, at the same time, the authority concerned is required to read the Rule in the manner indicated above." Following the said decision numerous matters came to be disposed of both, by the High Court and the Tribunal. Ultimately, the matter came before this Cour....

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....ivision Bench in the case of Dilip N. Shroff Vs. Joint Commissioner of Income Tax, Mumbai (supra) needs consideration. The Explanations added to Section 271(1)(c) in entirety also indicate the element of strict liability on the assessee for concealment or for giving inaccurate particulars while filing returns. The judgment in Dilip N.  Shroff's case has also not considered the provisions of Section 276C of the Income Tax Act. Therefore, in our view, the judgment in the case of Dilip N. Shroff Vs. Joint Commissioner of Income Tax, Mumbai (supra) needs consideration by the larger Bench of this Court particularly when it has ramifications not only regarding provisions of the Income Tax Act but also with regard to the provisions of Section....