TaxTMI 
TaxTMI 
1979 (9) TMI 42
X X X X Extracts X X X X
X X X X Extracts X X X X
....ances of the case and on a correct interpretation of section 285A(2) of the Act, the Appellate Tribunal was justified in cancelling the fine levied by the Commissioner of Income-tax ? " The assessee had entered into a contract with the Reserve Bank of India for a sum of about Rs. 5 lakhs on March 27, 1967, for the construction of a building for it at Hyderabad. The assessee did not furnish the particulars as per the provisions of s. 285A(1) read with r. 120 of the I.T. Rules. The Commissioner initiated proceedings for the levy of fine under s. 285A(2) and issued a show-cause notice to the respondent-assessee as to why he should not be proceeded against under s. 285A(2). The assessee made oral submissions through its advocate and also fil....
X X X X Extracts X X X X
X X X X Extracts X X X X
....fine " is a more severe and a stronger expression than penalty, which is quasi-criminal i nature and, therefore, default per se will not expose the assessee to fine as the department has failed to prove criminal intent or contumacious conduct or deliberate intention on the part of the assessee to disregard the statutory provisions and, therefore, allowed the appeal. The application filed by the department under s. 256(1) of the Act was rejected by the Tribunal on the ground that no question of law arises out of the order of the Tribunal. Hence, this reference under s. 256(2) of the Act. Sri P. Rama Rao, the learned counsel for the revenue, contended that the Tribunal erred in law in holding that fine imposable under s. 285A(2) of the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....escribes Form No. 52 for furnishing the requisite particulars. Such information is really necessary for the purpose of proper computation of the income of such contractors as per the provisions of the Act. This obligation has to be discharged by the class of contractors referred to in s. 285A(1). This requirement is not applicable to contractors, the value of whose contract for carrying out any work or for the supply of goods or services is less than Rs. 50,000. It is only in the case of big contractors, where the value of the contract for carrying out any work or for the supply of goods or services or both exceeds Rs. 50,000, that the concerned person is obliged to furnish the particulars as required under s. 285A(1). Sub-section (2) of s.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....equired to impose fine in each and every case as the word used is " may ". It cannot be said that it is mandatory on the part of the Commissioner to invariably impose fine in each and every case where there is default in complying with the provisions of s. 285A(1) by any contractor. The Commissioner has to exercise the power vested in him under sub-s. (2) to s. 285A in a judicious, fair and proper manner, and not arbitrarily or whimsically. The discretionary power being statutory in character, he cannot impose the fine arbitrarily or unreasonably. The very fact that no minimum amount of fine is fixed indicates that free discretion is given to the Commissioner, who is the highest officer of the department in the State, to exercise the power ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ection 35(1) of the Act creates a quasi-criminal offence. It is a regulatory provision. It is enacted with a view to safeguard the interests of the public regarding trust money. The offence in question is punishable only with fine. The conviction under that does not, carry any stigma. The language of the provision appears to make its contravention an absolute liability. Under these circumstances, we think the offence mentioned in that section is an absolute one. Consequently we cannot read into it the requirement of mens rea. This decision supports the view expressed by us. The language of s. 295A makes its contravention an absolute liability. We may refer to a decision of a Full Bench of this court in Addl. CIT v. Dargapandarinath Tu....