Delhi High Court
Commissioner Of Income-Tax vs Freewheels India Limited on 23 October, 2000
Author: A Pasayat
Bench: A Pasayat, D Jain
JUDGMENT
Arijit Pasayat, C.J.
1. Pursuant to the directions by this court under Section 256(2) of the Income-tax Act, 1961 (in short "the Act"), the follow-
ing questions have been referred by the Income-tax Appellate Tribunal, Delhi Bench-D (in short "the Tribunal"), for the opinion of this court : In R. A. No. 45 (Delhi) of 1976-77 :
"1. Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in holding that the assessed-company had a reasonable cause either in not filing the estimate of advance tax or for not paying the advance tax during the accounting period relevant to the assessment year 1967-68 ?
2. Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in cancelling the penalty of Rs. 50,000 imposed under Section 273(b) for the assessment year 1967-68 and whether the provisions of Section 212(3) are not attracted in this case ?"
2. In R. A. No. 46(Delhi) of 1976-77 :
"1. Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in holding that the assessed-company had a reasonable cause either in not filing the estimate of advance tax during the accounting period relevant to the assessment year 1968-69 ?
2. Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in cancelling the penalty of Rs. 40,000 imposed under Section 273(b) for the assessment year 1968-69 and whether the provisions of Section 212(3) are not attracted in this case ?"
3. For the relevant assessment years 1967-68 and 1968-69, assessments were completed finally on the total income of Rs. 11,47,450 and Rs. 8,82,786, respectively. The assessed was required to file an estimate of its income for the relevant assessment years under Section 212(3) of the Act and pay tax accordingly, as first assessment in this case was made on March 25, 1968, for both the years under consideration. It was, therefore, a case of a new assessed who had not been hitherto assessed. The Income-tax Officer observed that the assessed filed an estimate of its tax liability at Rs. 5,50,000 on March 3, 1967, for the assessment year 1967-68 and at Rs. 4,93,950 on March 23, 1968, for the assessment year 1968-69. Fresh notices were issued to the assessed to show cause as to why penalty under Section 273 should not be levied. Various contentions were raised by the assessed which did not find acceptance of the Assessing Officer. Penalties of Rs. 50,000 and Rs. 40,000 for the assessment years 1967-68 and 1968-69, respectively, were imposed. The penalties were questioned in appeals before the Appellate Assistant Commissioner (in short "the AAC") who upheld the penalties levied. The matter was carried in appeals before the Tribunal. After considering the rival stands, the Tribunal came to the conclusion that there was reasonable cause for not paying the Installment in time. It was noted that while considering the case of liability for penalty under Section 140A(3) of the Act, the same was held to be not leviable and ultimately in the assessed's own case in Addl. CIT v. Free Wheels India Ltd.
[1982] 137 ITR 378 (Delhi), it was held that the finding regarding acceptance of reasonable cause was a finding of fact. We are of the view that the same logic also applies to a case of levy of penalty under Section 273 of the Act. Therefore, the conclusions of the Tribunal being essentially factual, no question of law is involved. Accordingly, we decline to answer the questions referred. The references are accordingly returned unanswered.
