Prakash Krishna, J. - (1.) The Income Tax Appellate Tribunal, Allahabad at the instance of the Revenue has referred the following question of law under Section 256 (1) of the Income Tax Act 1961 (hereinafter referred to as the Act) for opinion to this Court: "Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in holding that no penalty could be imposed on a registered firm where the advance-tax paid exceeded the tax assessed on it as a registered firm even though as an unregistered firm the tax payable would be more than the advance-tax?"
(2.) The reference relates to the assessment year 1983-84. The income tax return for the assessment year 1983-84 was due on 31st July, 1983 as the accounting period ended on 31st March, 1983. It was filed on 19th November, 1985 and was late by more than 27 months. The Income-tax Officer initiated penalty proceedings under Section 271 (1) (a) of the Act for late filing of the return of income. A written reply was filed to the show cause notice. The penalty was imposed to the tune of Rs. 2,955/- and while calculating the penalty the assessed tax was determined by treating the assessee, which was registered firm, as an unregistered firm as per the provisions of Section 271 (2) of the Act. The penalty order was confirmed in appeal. However, in further appeal, the appellate Tribunal held that the penalty under Section 271 (1) (a) was not leviable as the advance tax paid by the assessee was more than the tax calculated (on the basis of the registered firm) on the assessed income.
(3.) Heard the learned standing counsel for the department. None appeared on behalf of the assessee.;