B.J.DIVAN, J. - (1.) IN this case by an order of reference dated September 4, 1974, the following question has been referred to this Full Bench : "When by a taxation statute, sanction of penalty is provided in order to enforce compliance with a particular provision of the Act and the section providing for penalty requires that the non performance of the obligation without reasonable cause shall attract that particular penalty, (i) is absence of reasonable cause an ingredient of the offence for which the penalty is provided ; and (ii) has the taxing authority to prove absence of reasonable cause or has the party in default to prove the presence of reasonable cause ?"
(2.) THE order of reference makes it clear that it was in the context of S. 271(1)(a) of the IT Act, 1961, that this question arose before the Division Bench and, therefore, in order to answer correctly the question that has been canvassed before us, we reframe the question as follows : "When S. 271(1)(a) of the IT Act, 1961, provides for sanction of penalty in order to enforce compliance with a particular provision of the Act and the section requires that non performance of the obligation without reasonable cause shall attract that particular penalty, (i) is reasonable cause an ingredient of the offence for which the penalty is provided ; and (ii) has the taxing authority to prove absence of reasonable cause or has the party in default to prove the presence of reasonable cause ?" The matter was referred to the Full Bench because the Division Bench found itself unable to agree with the view taken by J. B. Mehta and T. U. Mehta, JJ. in Morvi Cotton Merchants' Industrial Corporation Ltd. vs. State of Gujarat, since reported in (1975) 36 STC 347 (Guj), and in Special Application No. 1059 of 1972 decided by the same Bench on July 18, 1974 [Motilal Joitaram Patel vs. Sales Tax Officer (1975) TLR 1589 (Guj)]. In those two cases the Division Bench, consisting of J. B. Mehta and T. U. Mehta, JJ., had taken the view that in provisions similar to S. 271(1)(a) of the IT Act, 1961, in the Sales Tax Act, where also the words "without reasonable cause" have been set out in the section providing for penalty, the burden is on the Revenue to prove absence of reasonable cause. The Division Bench felt that since those decisions had a direct bearing on the point arising in the instant case, since the Division Bench was unable to agree with that view, the particular question set out above was referred to this larger Bench.
(3.) IT is not necessary to refer to the facts of the particular case before us because it is only as a point of law arising on a construction of the statute that the matter comes before us as a Full Bench.;