ORDER
N. K. AGRAWAL, J.M. :
In this Revenues appeal relating to asst. yr. 1981-82, the only substantive ground relates to the deletion of penalty of Rs. 26,218 levied under S. 271(1)(a) of the IT Act, 1961.
2. Due date for filing of the return in this case was 31st July, 1981 but it was filed on 31st March, 1984. Since there was a delay of 32 months, the Assessing Officer levied penalty for delay in filing of the return.
3. The first appellate authority deleted the penalty mainly on the ground that no demand of tax was created at assessment and, therefore, since the tax paid or deducted at source was in excess, it was not a case of levy of penalty. The assessee carried on the business of doing contract works and an amount of Rs. 23,848 was deducted at source. The assessee pleaded before the first appellate authority that he could not obtain certificate regarding deduction of tax at source from the contracting departments. Total amount of tax on regular assessment was worked out at Rs. 19,678. No tax was payable on regular assessment and no demand was created.
4. The learned counsel has submitted before us that the assessee got a refund of Rs. 4,070. The learned Departmental Representative has, however, argued that the assessee did not file any application seeking extension of time and, therefore, its plea that it did not have the certification regarding deduction of tax at source, should not be accepted. If the assessee had any genuine difficulty, he could have sought extension of time. It has also been pointed out by the learned Departmental Representative that the certificate regarding Tax Deducted at Source (TDS) was obtained by the assessee in the month of July, 1982, except one certificate. Therefore, the learned Departmental Representative has challenged the assessees plea that it was on account of not having received the requisite certificate that the assessee could not file the return in time.
5. The learned counsel has vehemently argued that it was a case of no demand on regular assessment and, therefore, there could not be any justification for the levy of penalty. He placed reliance on a decision of the Gauhati High Court in the case of CIT vs. Maskara Tea Estate (1981) 130 ITR 955 (Gau). It has been held in that case that if a taxpayer commits default regarding filing of return but pays off his arrears by way of payment of advance tax or deduction at source, he is not liable to penalty. If a person paid up the entire amount of tax and has paid up his assessed tax by one of the two methods recognised in the Expln. to S. 271(1)(a)(i) , he was not responsible to pay penalty. Reliance is also placed by the learned counsel on another decision of the same High Court in the case of CIT vs. Ganesh Das Sreeram (1983) 141 ITR 946 (Gau). It has been held in that case that the idea behind the imposition of penalty is to take care of the revenue, apart from penalising the wrongdoer. Now, if a person had paid in advance the full amount of the tax payable, there would be no logic in penalising him in so far as interest of the Revenue in the collection of the tax is concerned. Our attention has also been drawn to a decision of the Madras High Court in the case of CIT vs. Fomra Bros. (1980) 122 ITR 312 (Mad). In that case, it has been held that where the assessee had paid advance tax in excess of the tax assessed, there is no amount on which two per cent of the tax can be calculated as penalty. Consequently, no penalty could be levied in such a case for the delayed furnishing of the return. The learned counsel has also cited two decisions of the Punjab & Haryana High Court one in the case of CIT vs. Braham Parkash & Co. (1989) 179 ITR 422 (P&H) and the other in the case of CIT vs. Harish Chand & Co. (1989) 179 ITR 419 (P&H). In these two cases, it has been held that no penalty was leviable under S. 271(1)(a) for a delay in filing the return where the tax deducted at source or paid in advance is equal to or exceeds the assessed tax payable by a registered firm.
6. Looking to the entire facts of the case and the case laws, we find that the first appellate authority has taken a correct legal view in the matter and since the assessee had paid tax at source and no demand was created, it was not a case where any penalty could be levied. Therefore, we find that the penalty has been rightly deleted.
7. In the result, the appeal fails and is dismissed.