1980 (5) TMI 28

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....J.-In this reference for the assessment year 1963-64, the following question has been referred to this court : " Whether, on the facts and in the circumstances of the case and on a correct interpretation of section 271(1)(a) of the Ircome-tax Act, 1961, the Tribunal was right in holding that the words 'every month during which the default continued' appearing in the said section refer only to a....

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..... 271(1)(a) has to be calculated on the basis of the tax found payable on the date of imposition of the penalty and on the basis of the period of default being complete months. Hence the aforesaid reference has been made. Clause (a)(i) of s. 271 directs the ITO to impose a penalty " In addition to the amount of tax, if any, payable by him, a sum equal to two per cent. of the tax for every month....

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....by a Division Bench of the Madras High Court in the case of CIT v. Kadri Mills (Coimbatore) Ltd. [1977] 106 ITR 846. There, their Lordships held that the word " month " occurring in s. 271(1)(a) of the I.T. Act, 1961, had to be reckoned according to the General Clauses Act, 1897. Accordingly, when an assessee who was granted time for filing his return for the assessment year 1961-62, till 15th Jan....