RAJESH BINDAL, J. - (1.) FOLLOWING question of law has been referred for opinion of this Court by the Income -tax Appellate Tribunal, Chandigarh of 1985, in respect of the asst. yr. 1978 -79 : "1. Whether, on the facts and in the circumstances of the case, the Tribunal erred in law in holding that the estimate cognizance of and as such was not in accordance with (law, with) the result penalty under s. 273(c) was leviable upon the assessee -
(2.) THE facts as recorded in the statement of the case are as under : "In both the cases, the ITO demand advance tax under s. 156 r/w s. 210 of the Act payable during the financial year 1977 -78 relevant to the asst. yr. 1978 -79. By virtue of the provisions of s. 211(1)(ii), the advance tax was payable in any assessee who is required to pay advance tax by an order under s. 210 if, by reasons of the current income being likely to be greater than the income on which the advance tax payable by him under s. 210 has been computed or for any other reason, the amount of advance tax computed in the manner laid down in s. 209 on the current income (which shall be estimated by the assessee) exceeds the amount of advance tax demanded from him under s. 210 by more than 33.1/3 per cent of the latter amount, he shall at any time before the date on which last instalment of advance -tax is due from him, send to the ITO an estimate of the current income and the advance -tax payable by him on the current income calculated in the manner laid down in s. 209 and shall pay such amount of advance -tax as accords with his estimate on such of the dates applicable in his case under s. 211 as have not expired, by installments which may be revised (3A). Upward estimate of the current income and the advance -tax payable thereon by the assessee is required to be filed beyond the time prescribed under the Act were invalid and, therefore, these were no estimates in the eyes of law. He, therefore, initiated penalty proceedings under s. 273(c) of the Act which provides that if the ITO in the course of any proceedings in connection with regular assessment for any assessment year is satisfied that any assessee has without reasonable cause failed to furnish. an estimate of advance tax payable by him in accordance with the provisions of s. 212(3A) of the Act, he may direct that such person shall, in addition to the amount of tax, if any, payable by him, pay by way of penalty which shall not be less than 10 per cent but shall not exceed 1/4 times of 75 per cent of the assessed tax as reduced by the advance tax demanded under s. 210."
(3.) ACCORDINGLY , penalty under s. 273(2)(c) of the Act was levied on the assessee. In appeal against the order of penalty before the Commissioner of Income -tax (Appeals), Ludhiana [for short 'the CIT(A)'], the assessee succeeded wherein CIT(A) held that mere delay of one day in filing the estimate of advance tax was not deliberate but was beyond the control of the assessee. However, the Tribunal reversed the view taken by the CIT(A). After hearing learned counsel for the parties, we find substance in the contention raised by the learned counsel for the assessee that mere delay of one day in filing the estimate of advance tax, the assessee could not be punished with levy of such a harsh penalty. The reason for delay of one day was totally beyond the control of the assessee as his main source of income was share from M/s Nav Bharat Banaspati & Allied Industries, Doraha and filing of estimate of advance tax was dependent upon the intimation by the said firm. Still further, he submitted that the assessee was not to gain anything by filing the estimate by delay of one day only, rather the error was committed as the period was considered as on or before 15th of the month instead of before 15th of the month. In such situation, the estimate of advance tax filed by the assessee could not be declared to be invalid. Once a reasonable explanation is available and levy of penalty during the relevant period was envisaged in the absence of reasonable explanation, in our view, there was no justification for levy of penalty for mere technical default when the delay was merely of a day.;