Karnataka High Court
The Commissioner Of Income Tax vs U Monohar Rao on 2 March, 2010
Equivalent citations: 2010 (4) AIR KAR R 697
Bench: K.L.Manjunath, B.V.Nagarathna
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS T HE 21""-7' DAY OF MARC 14. 2010
PRESENT Vu"__
THE HONBLE MRJUSTICE K.L.MANJUNA1j§;1_"'~ --
AND
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INCKMMEKHMKAPPEALr«;2é8stX32Oo5T-.7 TTTT
Between:
1. The Commissioner of Eneo;nVe..:T'a;c
C.R.Bui1ding. Atta\.'a~1:_a. T " '
Mangalore.
2. The AssistanlaCommisvsmne-;j;oE'; 1"'
income Tax_... 'C3j_Vr'e1e gs T' '
C.R.Bui1di_n?_g ;'XifL_aVa.ra;__
Q 5
Mangalorie. Appellants
{By
for Sri.MA/'.'SVesh.ac:«hae1a«._bAdvocate}
.--=.And:
?_SrLLLhh1noharvRao
{By ST'r-i.S-._;.P.'S'hat, Advocate}
U{'iL'1Vpi_." Respondent.
***ti<>i< *«__T};'1is Income Tax Appeai is filed under Section
-f26tI'V--A' of Income Tax Act, 196}. arising out of T"-,ordé3r' dated 14.03.2005 passed in ITA "--.VN"o{3-43/BANG/2003 for the assessment year 1988- praying to formulate the substantiai question :-/T"
the same and therefore recorded a perverse t'ind11'1g,.
{3} Whether the Triburial should have into consideration that the not assigned any expianation for in fiiing of the return oi"»--inc0'_4n1ed"'a4nd»'_".
explanation offered was'-._ ogriiy' fol". purpose of belated pe1}A'e'm_ent. of 'taxe:+j..d5- A .V
2. The respondent W tifetttirn of income for thejasse_sds'rrieht.tit"y.earH'A1§88w89 declaring a total The said assessrr;"e4ri'j.t....:.'was §)j"'oc'es:s'e'dv-...I.inder Section 143 read of the Income Tax Act. aildhwas 27.03.1997. The Assess'i'11g, .Q'i'i;i<:e'i'. however initiated Section 271[1}[a] of the Act arid"-t'.__%not"i'e_es['x-_..~'were issued request.in;g_§ the _asses"see'Ate"show cause as to why the penalty the said provision should not be levied return of income belatedly. The "~,responder1t. -~ explained stating that he t?/.
was not in a position to pay the self assessment. of the tax on account of paucity of funds and therefore. the said explanatiion had to be taken into consideration and proceedings be dropped. The however, did not accept the e~x"pi'a.na-t.io_31'offe1*efd by the assessee and proceeded by its order dated 22.08.
challenged by be'f'o'1"e'VV' the Commissioner of I.nco~the'f'dT"Vax.._:iV"(A:z§.lj'peals) and being unsuce-es;.s.'fuli=__ Challenged the O1'5.T:1€I"' --.a:p.pe_11_ate authority dated
26. 12.20132' , Appellate Tribunal, BaI1gE§IOITC Bxe11e_Vh." Tribunal while accepting offered by the assessee. set of penaity dated 22.08.1997.
V .Beinig" aggrieved by the said order, the Revenue this appeal. /"
3. We have heard learned counsel for the department: and learned counsel for the respondent ~ assessee.
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4. It is pointed out that on behalf ()lfl1.._ht:V ' assessee, that the reason for the of the income tax returns was for .'n'o't--.:'ha".zing sufficient funds to pay the the said explanation is 'a_"'i.z.alid'v~a1id cause. But the Assess_i.nng.__ not accept the same ande-hasVl';:erro'n.ed0usly levied pena.ltya_pro_eee_dian3gs.-,V _ _
5. Onpermsal_"o.f=th'e_inaterial on record. it is noticed by"'--«,us that 'the assessee has income 'V'frOm..':_:"'ho1jse pr'o'p--e--rty and agricultural lands. the house properties was dernr;l'ish_ed7l_and taken up for construction of a d".,_c:ornmer§:1':a1 complex and portions of the said it was sold after construction and the 9» proceeds were utilised for completion of the said building. It": is also on record that the assessee was receiving rental income other properties. Merely bec2;1use the u had taken loans for the cQiiAst.'i"«:.1e;io_nno.1" Vtheln said building, it Cannoi, «.
assessee had no fu11ds'~.4/its) assessment tax as It is on record that thefl receiving rental income' of the building ' ldtglenliolished and _ incumbent. on the assesseleie to=._l'ir..s*'. the tax that were due by f'ili;n'g_theV as_s'e"ssr.r1ent in time and thereafter the _b"a._lance funds for oilher purposes.
6. "A is under a duty to pay his taxes ll"7.'A"--rvVe'guelarlyiend horlesizly. There is behind every 'W€3xé1tiAor'1 a moral sanction as it is behind every legislation. Taxes are in fact life»-blood fir Ap p el lgat ep Tri isunal.
Assessing Officer. Heiiee, in our View the levy of penalty was just and proper. The Tribunal was not right in brushing aside the said faetps and accepting the explanation of the that there was a paucity of funds not a Valid reason for not paying also assessment in time. "~T'hei'esfd.1?e:;'they imposition of penalty ui1deVl'r"a.Section-.2"7'll{l:'}§(a) of the Act is just and;._4_."pro.peir.:Vi" substantial questions of __law are'":--.iV_a'CCordingly answered in._ l:i1'lV_VO1v1li" :1_oVf the"ll"1"e'vei1ue. We aceordia_nglly_'i"'Va_.l,lolyy:-- _a_plpeal filed by the Revenueljbyp the order of the §..:'w:
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