1979 (11) TMI 27

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....ent year 1960-61 had been filed on November 2, 1962, and that for the assessment year 1961-62 on March 8, 1963. The assessments having been completed after April 1, 1962, the ITO took proceedings under s. 271(1)(a) for the delay in the filing of the returns. After considering the assessee's explanation, he imposed on the assessee penalties of Rs. 3,276 and Rs. 2,328, respectively, for the two years. This was levied by him at 2% of the tax payable for every month of default as provided in s. 271(1)(a). These penalties were confirmed by the AAC. The assessee preferred further appeals to the Appellate Tribunal. The Tribunal held that the assessee had committed default and that the levy of penalty was called for. It also rejected the content....

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.... Punj [1973] 92 ITR 394. In that case, this court has upheld the levy of penalty in similar circumstances by reference to the provisions of the new Act. The High Court has held that while the ITO has a discretion to decide to levy or not to levy a penalty under s. 271(1)(a) once he decides to do so, he has to levy a penalty at 2% and he has no discretion to levy the penalty at a lower or higher rate. The action of the Tribunal in reducing the penalty for the same reasons as in the present case to a figure less than a sum of 2% was disapproved by this court. Having regard to the decision of this court we have to hold that the Tribunal was not justified in reducing the amount of penalty imposed by the ITO and confirmed by the AAC. The questio....