COMMISSIONER OF INCOME TAX vs. AMBICA CEMENT PRODUCTS

ITR/13/1993HC GujaratGJHC24021145199309 February 2005Author: HONOURABLE MR. JUSTICE D.A.MEHTA,HONOURABLE MS. JUSTICE HARSHA DEVANI3 pages
AI SummaryRemanded

What were the facts?

The Commissioner of Income Tax (Revenue) filed a reference application before the High Court of Gujarat at Ahmedabad challenging an order of the Income-tax Appellate Tribunal (Tribunal). The assessee, Ambica Cement Products, had filed its return of income for Assessment Year 1979-80 on August 7, 1980, which was due on June 30, 1979. The Assessing Officer initiated penalty proceedings under Section 271(1)(a) of the Income-tax Act, 1961, and imposed a penalty of Rs. 9,900/-. The assessee's appeal before the Appellate Assistant Commissioner was unsuccessful. The Tribunal, however, partially allowed the assessee's appeal, holding that the assessee could not be penalized for the overlapping period from January 1, 1980, to March 31, 1980, as a penalty had already been levied for Assessment Year 1978-79 for the same period. The Tribunal noted similar relief was granted for Assessment Year 1977-78.

What did the High Court hold?

The High Court answered the referred question in the negative, in favour of the Revenue and against the assessee. The Court, following the ratio of its decision in Commissioner of Income-tax Vs. J.L. Trivedi & Sons., held that the penalty under Section 271(1)(a) is a civil liability and not a punishment for an offence, thus the principle of double jeopardy is not applicable. A subsequent default in filing a return, even if it overlaps with a period for which penalty was levied in a prior year, is an independent default. However, the Court directed the Tribunal to record an independent finding as to whether the assessee was prevented by a reasonable cause from filing the return of income by the due date, after giving adequate opportunity of hearing to the parties. The reference was disposed of accordingly.

What were the issues?

1. Whether, in law and on facts, the Income-tax Appellate Tribunal was right in holding that the assessee cannot be penalized under Section 271(1)(a) of the Income-tax Act, 1961, for the late filing of the return for the period from January 1, 1980, to March 31, 1980, on account of overlapping of period? Assessee's Contention: The Tribunal held that since the assessee had already been penalized for Assessment Year 1978-79 for the period up to March 31, 1980, it could not be penalized again for the same overlapping period in the subsequent Assessment Year 1979-80. The Tribunal also noted that similar relief was granted for Assessment Year 1977-78. Revenue's Contention: The Revenue argued that Section 271(1)(a) imposes a civil liability, not a criminal punishment, and therefore, the principle of double jeopardy is not applicable. The subsequent default in filing the return is an independent default. The Revenue relied on the decision of the High Court in Commissioner of Income-tax Vs. J.L. Trivedi & Sons. [1994] 210 ITR 112. However, the Revenue fairly conceded that the question of reasonable cause needs to be decided on the facts of each case.

Which sections of the Income-tax Act were involved?

Section 271(1)(a),Section 256(2),Section 143(3)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No.13 of 1993

For Approval and Signature:

HON'BLE MR.JUSTICE D.A.MEHTA and HON'BLE MS.JUSTICE H.N.DEVANI ============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements?

2.

To be referred to the Reporter or not? : NO 3. Whether Their Lordships wish to see the fair copy : NO of the judgement?

4.

Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder?

5.

Whether it is to be circulated to the concerned : NO

The order continues below.

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