Commissioner Of Surtax vs International Airport Authority ...
2001 Latest Caselaw 1240 Del

JUDGMENT

1. At the instance of the Revenue, the following question has been referred by the Income-tax Appellate Tribunal, Delhi Bench (in short "the Tribunal"), for the opinion of this court under Section 256(1) of the Income-tax Act, 1961 (in short "the Act"), read with the provisions of the Companies (Profits) Surtax Act, 1964 (in short "the Surtax Act"):

"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that penalty is not leviable under Section 9 of the Surtax Act if the assessed has filed the return under Section 5(2) of that Act but had failed to file the return under Section 5(1) of that Act ?"

2. The dispute relates to the assessment year 1973-74.

3. The factual position in a nutshell is as follows :

4. The assessed a public limited company was required to furnish its return of income of chargeable profits under Section 5(1) of the Surtax Act, 1964, by September 30, 1973. However, the assessed filed its return on October 30, 1974, in response to a notice under Section 8(a) of the Surtax Act. Penalty was levied under Section 9(a) by the Assessing Officer on the ground that the assessed has failed to comply with the requirement of filing return within the stipulated period. The matter was carried in appeal before the Commissioner of Income-tax (Appeals), (in short "the CIT(A)"). The said authority held that section 9 refers to failure of a person to furnish a return as required under Section 5 of the Act. According to him, the section did not relate to any delay in filing the return in terms of Section 5(1) and since the assessed had filed the return under Section 5(2), penalty was not exigible. The Revenue carried the matter in appeal before the Tribunal. The view of the Commissioner of Income-tax (Appeals) was upheld by the Tribunal and it dismissed the appeal.

5. On being moved for reference, the question set out above has been referred.

6. We have heard counsel for the Revenue. There is no appearance for the assessed.

7. According to learned counsel for the Revenue, the requirement of filing the return is stipulated under Section 5(1) which was not complied with and therefore penalty was exigible.

8. The assessed's stand was that the return was filed under Section 5(2) and there was no default in terms of section 9. Section 6 provides the mode of assessment and it is section 9 which provides for penalties and is as under : "9. Penalties.-- If the Income-tax Officer, in the course of any proceedings under this Act, is satisfied that any person has, without reasonable cause failed to furnish the return required under Section 5, or to produce or cause to be produced the accounts, documents or other evidence required by the Income-tax Officer under Sub-section (1) of Section 6, or has concealed the particulars of the chargeable profits or has furnished inaccurate particulars of such profits, he may direct that such person shall pay, by way of penalty, in addition to the amount of surtax payable, a sum not exceeding-

(a) where the person has failed to furnish the return required under Section 5, the amount of surtax (chargeable under the provisions of this Act);

(b) in any other case, the amount of surtax which would have been avoided if the return made had been accepted as correct:

Provided that the Income-tax Officer shall not impose any penalty under this section without the previous authority of the Inspecting Assistant Commissioner."

9. It is now well settled that in construing the provisions of an Act nothing is to be added, nothing is to be subtracted and nothing is to be implied unless there is a clear indication in the Act itself for doing so. Therefore, while deciding the issue before us, keeping this cardinal principle of law in our focus, the question has to be examined. In Section 9 of the Act, extracted supra, the language used nowhere indicates anything about imposition of penalty for delay in furnishing the return. This section deals with defaults such as failure to furnish the return without reasonable cause under Section 5 or to produce or cause to be produced the accounts, documents, etc., under Section 6(1) or concealing particulars of the chargeable profits or furnishing inaccurate particulars of such profits. There is penalty provided in Clause (a) of this section where a person has failed to furnish the return required under Section 5. In Clause (b) there is penalty for the other defaults mentioned in the preamble to the section. But there is no penalty specifically provided for failure to furnish the return within time. In other words, there is no penalty provided for delay in furnishing the return. In so far as the return is concerned, the penalty is provided only for failure to furnish it.

10. Sections 20, 21 and 22 deal with certain types of defaults. Section 20 deals with failure to deliver returns. It provides that if any person fails without reasonable cause to furnish in due time any return under Sub-section (2) of Section 5, or to produce or cause to be produced, any accounts, etc., he can be penalised with fine which may extend to Rs. 500 which may further be extended to Rs. 10 for every day during which the default continues. Similarly, there is simple imprisonment provided for false statements in Section 21.

There is also simple imprisonment provided for abetment of false returns as in Section 22. But from these provisions, we do not find anywhere any reference for delay in submission of the return under Sub-section (1) of section 9 of the Act.

11. A similar question was considered by this court in CIT v. Triveni Engineering Works Ltd. [1985] 154 ITR 561. It was held that under similar circumstances, penalty was not leviable.

12. In view of what has been stated above, we answer the question in the affirmative, in favor of the assessed and against the Revenue.