Judgment:
T.D. Sugla J.
1. The Income-tax Appellate Tribunal referred to this court only one question of law. The question reads thus :
'Whether, on the facts and in the circumstances of the case, the Tribunal was right in cancelling the Income-tax Officer's order under section 140A(3) of the Income-tax Act, 1961, imposing penalty of Rs. 10,700 as ultra vires ?'
2. The proceedings relate to the assessment year 1971-72. The Tribunal held that the provisions of section 140A(3) to be ultra vires following the Madras High Court decision in the case of A. N. Sali Maricar : [1973]90ITR116(Mad) , observing that at the time it was deciding the appeal, there was no decision of any other High Court taking a contrary view.
3. It was pointed out by Shri Jetley, learned counsel for the Department that the position has since material change inasmuch as the Andhra Pradesh High Court in Kashiram v. ITO : [1977]107ITR825(AP) , the Madhya Pradesh High Court in CIT v. Vrajlal Manilal and Co., : [1981]127ITR512(MP) and the Jammu and Kashmir Court in Sevaram v. ITO have taken a contrary view. He argued that, in view of the conflicting views taken by different courts, our court's decision in the case of CIT v. Smt. Godavaridevi Saraf : [1978]113ITR589(Bom) , was not applicable. Since the Tribunal was not competent to consider the vires of the Act, the Tribunal could not have ignored the provisions of section 140A(3), in support, Shri Jetley placed reliance on our High Court's judgment in the case of CIT v. Shri Udaybhan Ladharam (Income-tax Reference No. 114 of 1976-dated January 27, 1987).
4. Shri Mandoli, learned counsel for the assessee, on the other hand, stated that the question was whether, when the Tribunal ignored the provision of section 140A(3) as being ultra vires. It was justified indoing so. The Tribunal, he pointed out, decided the appeal on June 6, 1975. As, on that date, there was no decision of any High Court where a view contrary to the view taken by the Madras High Court in A.M. Sali Maricar v. ITO : [1973]90ITR116(Mad) was taken. He then placed reliance on our court's two decisions in the cases of CIT v. B.B.Poojara (I.T. Reference No. 4 of 1976-dated February 22, 1984, and CIT v. Smt. Nirmalabai K. Darakar (Income-tax Reference No. 342 of 1976-dated December 19, 1988) : [1990]186ITR242(Bom) . In both these cases, out court, following our court's earlier decision in CIT v. Smt. Godavaridevi Saraf : [1978]113ITR589(Bom) , confirmed the Tribunal's order ignoring the provisions of section 140A(3).
5. In our judgment, when the reference is being decided today, we have to consider the legal position obtaining as on today. There can be no dispute that, as on today, the legal position is that while the Madras High Court has struck down the provisions of section 140A(3) in Sali Maricar (A.M.) v. ITO : [1973]90ITR116(Mad) , the Andhra Pradesh High Court in Kashiram v. ITO : [1977]107ITR825(AP) , the Madhya Pradesh High Court in CIT v. Vrajlal Manilal and Co., : [1981]127ITR512(MP) and the Jammu and Kashmir High Court in Seva Ram v. ITO have upheld its validity. Therefore, what is required to be examined is whether our court's judgment in CIT v. Smt. Godavaridevi Saraf : [1978]113ITR589(Bom) is applicable. It has been categorically held in that case the Tribunal would be justified in ignoring the provisions of a statute even if there was only one decision of a High Court, may be of a High Court other than a High Court under which that Tribunals functioning, striking down the particular provisions of law provided there was no decision of any other High Court taking a contrary view. Obviously, therefore, our judgment in CIT v. Smt. Godavaridevi Saraf : [1978]113ITR589(Bom) is not applicable in the present case.
6. As to the two decisions of our High Court relied upon by counsel, it is seen that the fact that other High Courts had taken a contrary view was not brought to the notice of our court whereas our court decided the Nagpur case taking into account the fact that as against the decision of the Madras High Court striking down the provisions of section 140A(3), there were three High Court decisions taking a contrary view. It was held in that case that the Tribunal's view taking the provisions of section 140A(3) as ultra vires could not, therefore, be sustained. In our view, this decision is squarely applicable. Accordingly, we answer the question in the negative and in favour of the Revenue.
7. No order as to costs.
NOTICE OF MOTION No. 345 of 1977.
IN INCOME-TAX REFERENCE No. 614 of 1976.
T.D. Sugla J.
8. In a reference application filed by the Department the assessee sought to raise the following question of law under section 256(1) of the Income-tax Act, 1961 :
'Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the failure to pay the tax was not without reasonable cause and that the ratio of the Supreme Court's decision in Hindusthan Steel Ltd., did not apply to the case ?'
9. The Tribunal did not refer the question to this Court observing that the assessee's submission that it did not pay the self-assessment tax in the expectation generated by the earlier commencement of the assessment proceedings that the assessment would be completed within thirty days of the filing of the return was wholly untenable. It also found that the assessee was not prevented because beyond its control from making the payment of tax within time.
10. By this notice of motion, the assessee has again sought to raise the said question. It is seen that the Appellate Assistant Commissioner found that the assessee was prevented by reasonable cause in not making, the payment of tax within time. However, the Tribunal, as stated above, found that the assessee was not prevented by sufficient cause. Whether one agrees or does not agree with the conclusion of the Tribunal, it cannot be disputed or does not agree with the conclusion of the Tribunal, it cannot be disputed that the question whether an assessee is or is not prevented by sufficient cause in making payment of tax within time is a question of fact. Since the conclusion arrived at by the Tribunal is based on cogent material, it cannot also be accepted that the conclusion is perverse. In the circumstances, the Tribunal, in our view, was justified in not referred this question as a question of law to this court.
11. Notice of motion is, accordingly, dismissed with no order as to costs.