ORDER
George Cheriyan, Accountant Member
1. This is an appeal filed by the assessee and is against the penalty levied of Rs. 6,290 under the provisions of Section 140A(3) of the Income-tax Act, 1961 (‘the Act’). For the assessment year 1976-77, the assessee filed a return showing an income of Rs. 53,040 on 20-8-1976. The tax payable on this amount was about Rs. 19,000. But the assessee along with the return filed stated that an amount of Rs. 18,000 and odd was due to the firm in which the assessee was having 50 per cent share on account of refund due to tax deduction at source and, therefore, the assessee was only paying the balance of Rs. 1,855 by way of self-assessment tax. In due course the assessment was made and on 15-3-1979 a notice was issued to the assessee to show cause why penalty should not be imposed for default under Section 140A(3). There was no reply and the ITO levied a penalty of Rs. 6,290.
2. In appeal before the Commissioner (Appeals), the assessee urged that there was refund due in the case of Sir Bansilal & Co., Bombay, in which the assessee was 50 per cent partner and the assessment order in that case was passed on 17-9-1976. But the assessee received the refund only in 1977 and immediately thereafter the assessee paid Rs. 18,893 on 6-12-1977. (The eventual deposit which was to be made comes to Rs. 17,500.) It was, therefore, urged that there was sufficient cause for not paying the self-assessment tax. But the Commissioner (Appeals) took the view that the assessee was in default and, therefore, the penalty was rightly levied.
3. Before us the assessee urged that in the facts put forth, the penalty should not have been levied.
4. We have heard the learned departmental representative. There was excess tax deduction in the case of the firm in which the assessee was a 50 per cent partner. No doubt the firm is a different assessable entity but refund was due to the firm and the assessee’s share therein more than covered the deposit to be made of self-assessment tax by the assessee. The concept of payment of self-assessment tax is introduced to see that tax liability based on return figures is liquidated by the assessees and the money is not used for other purposes. When there are dues to the assessee by the revenue of certain amounts in the case of the firm in which the assessee is a partner and the assessee submits that in view of such dues further self-assessment tax is not paid, the conduct of the assessee cannot be construed as an attempt to deprive the revenue of any legitimate dues since an equal amount is lying with the revenue. There is also no loss of interest. The assessee-partner and the firm are two different entities and if the assessee does not independently pay the self-assessment tax though refund is due to the firm in which he is a partner, there may be default in the abstract. But such default being clearly a technical one, is venial and looking to the ratio of the judgment of the Supreme Court in the case of Hindustan Steel Ltd. v. State of Orissa [1972] 83 ITR 26, it is a default with reference to which penalty need not be imposed merely because there may be power to impose penalty. We, therefore, hold that in the present case no penalty should have been imposed under Section 140A(3). The penalty imposed is, accordingly, cancelled and the appeal is allowed.