JUDGMENT
N.V. Balasubramanian, J.
1. Pursuant to the directions of this court in T.C.P. No. 48 of 1982, dated August 30, 1980, the Appellate Tribunal has referred the following question of law under section 256(2) of the Income-tax Act, 1961, for our consideration.
“Whether, on the facts and in the circumstances of the case and having regard to the provisions of section 271(2) of the Income-tax Act, 1961, the Tribunal was right in holding that penalty was not leviable under section 271(1)(a) of the Act on the assessee-firm ?”
2. The assessment year involved is 1973-74, and the assessee-firm filed its return which was due on August 15, 1973, only on February 27, 1975. There was a delay in filing the return. The Income-tax Officer levied penalty under section 271(1)(a) of the Act. The Appellate Assistant Commissioner (Appeals) found that since the tax had been deducted at source in excess, there is no case for levy of penalty for the delay in furnishing the return and ordered the refund of the sum of Rs. 11,521. The Appellate Assistant Commissioner considered the cause for the delay in filing the return and came to the conclusion that there was no deliberate delay and cancelled the penalty. The Revenue preferred an appeal challenging the order of the Appellate Assistant Commissioner and the Appellate Tribunal held that since the assessed tax was a negative figure, the tax deducted at source being larger than the tax demanded resulting in refund of Rs. 8,349 the levy of penalty was not justified. The Appellate Tribunal, on the basis of the directions of this court, stated a case and referred the question of law set out earlier.
3. Mr. C. V. Rajan, learned counsel appearing for the Revenue, has fairly brought to our notice the decision of this court in CIT v. Fomra Brothers [1980] 122 ITR 312, wherein this court held that where the assessee had paid the advance tax under Chapter XVIIC of the Income-tax Act, 1961, in excess of the tax assessed, there is no amount on which two per cent. of the tax can be calculated as penalty under section 271(1)(a)(i)(b) of the Act, and, consequently, no penalty could be levied in such a case for the delayed furnishing of the return. We are of the view that the only distinguishing feature in the present case which distinguishes Fontra Brothers’ case , is that it is a case of tax deducted at source, while the earlier case was a case of payment of advance tax paid and are of the view that the ratio of the decision in Fomra Brothers’ case , would equally apply to a case where the tax was deducted at source as well. Following the earlier decision of this court in Fomra Brother’s case [1980] 122 ITR 312, we hold that since the tax deducted at source was in excess of the tax determined and calculated, there is no amount on which penalty could be calculated under section 271(1)(a) of the Act and, hence, the penalty could not be levied. We, therefore, hold that the Appellate Tribunal was correct in cancelling the penalty and we answer the question of law referred to us in the affirmative and against the Revenue. However, there will be no order as to costs.
