COMMISSIONER OF INCOME TAX, WEST BENGAL II Vs. SRI U. C. KHERUKA, CALCUTTA
LAWS(CAL)-1976-2-46
HIGH COURT OF CALCUTTA
Decided on February 18,1976

COMMISSIONER OF INCOME TAX, WEST BENGAL II Appellant
VERSUS
SRI U. C. KHERUKA, CALCUTTA Respondents

JUDGEMENT

Dipak Kumar Sen, J. - (1.)In this reference under Sec. 256 (1) of the Income-tax Act, 1961 at the instance of the Commissioner of Income-tax, West Bengal II, Calcutta, the point at issue is the calculation of penalty within the meaning of Sec. 271 (I) (a) (i).
(2.)For the assessment years 1961-62, 1962-63 and 1963-64, on account of delay in filling Income-tax returns, penalty was imposed on U.C, Kheruka, the assessee, by the Income-tax Officer. The penalty was sustained by the Appellate Assistant Commissioner on Appeal. When the matter came up before the Tribunal on further appeal by the assessee, a contention was raised for the first time that as there was no tax due on the date of levy of penalty, the demand having been met in the meantime, the penalty could not be calculated @ 2% with reference to any amount. The judgment of this Court in the case of Commissioner of Income-tax, West Bengal-I Vs. Vegetable Products Ltd, reported in 80 Income-tax Reports at page 14 was relied on. The Tribunal applied the said decision and directed the Income-tax Officer to calculate the amount of penalty on tax outstanding on the date when the penalty was levied.
(3.)The following question has been referred to us from this order of the Tribunal :
"Whether, on the facts and in the circumstances of the case, the penalty leviable within the meaning of section 271 (I) (a) (i) is with reference to the tax due under the demand notice or with reference to the amount, if any, due on the date of the levy of penalty."

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