The assessee had applied for registration. At long last the matter came up before the Income Tax Appellate Tribunal who by its order dated 1. 7. 72 allowed registration to the assessee firm for the assessment years 1961-62, 1962-63 and 1963-64. Of course, it held, as it was bound to hold, that the assessee was a genuine firm and was entitled to registration. How­ever the relevant previous year of the assessee, for the assessment year 1963-64, ended on 31. 3. 63. Accordingly, the return under section 139 (1) of the Income Tax Act, 1961 was dm on 30.9.63. A notice under section 139(2) was served on the assessee who made applications for extension of time upto 31. 12. 63. No application was made for further extension of time. A belated return was filed by the assessee on 28. 5. 66 declaring an income of Rs. 47,455.00. The Income Tax Officer, for short, 'the I.T.O." completed assessment at Rs. 53,096.00 which was reduced to Rs. 50,69700 by the appellate authority. The I. T. O. set afoot a penal action against the assessee u/s. 271(1)(a). The I. T. O. was not satisfied with the explanations offered by the assessee and levied penalty @ 2% of the tax which came to Rs. 10,951/- but he restricted the penalty to Rs. 9,777/- being 50% of the tax of Rs. 19,555/-. The assessee appealed and contended that its status had been wrongly determined as unregistered firm for the assessment year (1963-64) and the tax payable by it was wrongly computed at Rs. 19,555/- treating it to be so (an unregistered firm). The assessee relied on the order of the Tribunal dated 1.7.72 allowing registration for three assessment years including the assessment year in question. The assessee contended that the tax payable by it for the assessment year in the status of a registered firm was actually Rs. 1.670/- only, and, it had paid advance-tax of Rs. 1855/- on 3.12.62, that is, long before it was to submit the return. As such, no tax was ever in arrears for the year in question; it was entitled to refund of Rs. 183/- as a result of over-payment of advance tax. The Appellate Assistant Commissioner, for short "the A.A.C." held that no tax was payable by the assessee firm for the assessment year at the relevant time. As such, no tax was ever in arrears for the year in question; it was entitled to refund of Rs. 183/- as a result of over-payment of advance tax. The Appellate Assistant Commissioner, for short "the A.A.C." held that no tax was payable by the assessee firm for the assessment year at the relevant time. So the provisions of Sections 271(1)(a) were not attracted and cancelled the penalty order. The Revenue appealed to the Tribunal who upheld the order of the A. A. C. and held that (i) it was a case of failure to furnish return; (ii) at all relevant time the tax-payer was not in arrears; (iii) the tax­payer had paid more than the tax payable by it by way of payment of advance tax under Chapter XVIIC, and (iv) the assessee was not liable to penalty. It turned down the con­tention of the Revenue as to the applicability of the provi­sions u/s. 271 (2) of "the Act" on the facts and circumsta­nces of the case. It held that the legal fiction in section 271 (2) was limited for quantification of penalty of a registe­red firm, if any penalty was leviable on it under section 271(1)(a), read with Section 271(1)(a)(i). The Revenue prayed for a reference and the Income-tax Appellate Tribunal, Gauhati Bench Gauhati, in exercise of its power under section 256(1) of "the Act" has referred the following question for our determination :- "Whether on the facts and in the circumstances of the case and on a proper construction of section 271(1) (i) read with section 271(2) of the Income Tax Act, 1961, the Tribunal was justified in upholding the cancellation of the penalty by the Appellate Assistant Commissioner in the case of the assessee registered firm M/S Maskara Tea Estate; whether the tax payable as a registered firm was nil for the assessment year 1963-64 ?" (2) Mr. Talukdar, the learned Standing Counsel for the Revenue submits that clauses (a), (b) and (c) of Section 271(1) contemplate three different types of defaults. Once a person commits any of these defaults he is "liable to penalty" as Clauses (i), (ii) and (iii) of Section 271 (1) prescribe the amounts of panalty imposable for the defaults prescribed under Clauses (a), (b) and (c) respectively. Once a person commits any of these defaults he is "liable to penalty" as Clauses (i), (ii) and (iii) of Section 271 (1) prescribe the amounts of panalty imposable for the defaults prescribed under Clauses (a), (b) and (c) respectively. The learned Counsel con­tends that the provisions of Section 271 (1) (i) and 271 (2) prescribe the method of computation of penalty and none of them is a 'charging provision'. Accordingly, they should receive construction which makes the machinery for the computation of penalty workable and they should not be interpreted strictly like a charging provision. The learned Counsel points to the expression "liable to penalty" in section 271 (2) and submits that a registered firm is liable to penalty if it commits a default prescribed in Section 271 (1) (a) and one is not to look at the provisions of section 271 (1) (i) but should consider its peral liability u/s. 271 (2). The expression "notwithstanding anything contained in the other provisions of this Act, the penalty imposable under sub-section (1)..."overrides the provisions of the Act inclu­ding those contained in section 271 (1) (i). In short, the learned Counsel submits that even if a registered firm pays up his entire amount of tax including the assessed tax by way of advance-tax under Chapter XVIIC, it is liable u/s. 272 (1), once it fails to furnish return without reasonable cause as contemplated u/s. 271 (1) (a). Accordingly, the Counsel submits that the Tribunal has gone wrong in assuming that Section 271 (2) did not attract in the instant case as the registered firm had cleared up all its tax-arrears by way of advance payment of tax. (3) To answer the question posed by the Tribunal and to app­reciate the contentions of the learned Standing Counsel, it is nece­ssary to extract the provisions of Section 271 (1) (a), 271 (1) (i) and 271 (2). We extract the relevant provisions of Sections 271 (1) (a) and 271 (1) (i) of the Act, as they stood prior to amendment in 1974. We extract the relevant provisions of Sections 271 (1) (a) and 271 (1) (i) of the Act, as they stood prior to amendment in 1974. "271 (1) If the Income-tax Officer or the appellate Ass­istant commissioner in the course of any proceedings under this Act, is satisfied that any person- (a) has without reasonable cause failed to furnish the return of total income which he was required to furnish under sub-section (1) of Section 139 or by notice given under sub-section (2) of Section 139 or Section 148 or has without reasonable cause failed to furnish it within the time allowed and in the manner required by sub-section (1) of section 139 or by such notice, as the case may be, or *** *** *** he may direct that such person shall pay by way of penalty,- (i) in the cases referred to in clause (a), in addition to the amount of the tax, if any, payable by him, a sum equal to two per cent of the assessed tax' for every month during which the default continued, but not exceeding in the aggregate fifty per cent, of the 'assessed tax'. Explanation-In this clause 'assessed tax' means as reduced by the sum, if any, deducted at source under Chapter XVII-B or paid in advance under Chapter XVII-C.'' We extract the provisions of Section 271 (2) - "(2) When the person liable to penalty is a registered firm or an unregistered firm which has been assessed under clause (b) of Section 183, then, notwithstanding anything contained in the other provisions of this Act, the penalty imposable under sub-section (1) shall be the same amount as would be imposable on that firm if that firm were an unregistered firm." [ Emphasis supplied by us. ] (4) It has been urged on behalf of the assessee that the provisions of Section 271 (1)(a) and 271 (1)(i) are penal as it falls under Chapter XXI of the Act styled as "penalty impo­sable". Dr. Saraf for the Assessee has adopted the line of (reasoning of the learned Tribunal. It is true that the provisions fall in Chapter XXI, however, In fiscal statute there must be provisions to charge, assess and collect tax as well as penalty. A section may contain charging as well as assessing provisions. The true colour of the provision can be extracted upon due construction thereof. It is true that the provisions fall in Chapter XXI, however, In fiscal statute there must be provisions to charge, assess and collect tax as well as penalty. A section may contain charging as well as assessing provisions. The true colour of the provision can be extracted upon due construction thereof. It has been seri­ously urged by Dr. Saraf that the penal provisions of taxing statutes should be construed strictly in view of their harsh consequences. (5) We have, given our serious attention and consideration to the argument of Dr. Saraf about construction of fiscal sta­tutes. The implication of the principle that a taxing statute must be construed strictly is often misunderstood and unjusti­fiably extended beyond the legitimate field of its operation. We are of the firm opinion that 'in a taxing statute one has to look at what has been clearly stated. There is no persumption as to a tax/penalty. Nothing is to be read, nothing is to be implied. One can only look fairly at the language used'. We have proceeded in step with the familiar principles laid down by Rowlat J. in Cape Brandy Syndicate v. I. R. C. (1921) 1 KB 64 (77). We have merely added the word 'penalty'. A penalty is levy of additional tax, as held by the Supreme Court in C. I. T. v. Bhikaji Dadabhai and Co. (1961) 42 ITR 123. It is true that the scheme of the Income Tax Act, 1961 has been changed and Chapter XXI provides for penalty pro­ceedings separately but notwithstanding such changes the Supreme Court in Jain Brothers v. Union of India, (1970) 77 I. T. R. 7077 reiterated that penalty is an additional tax. It is true that penalty proceedings are penal in nature and character, in the sense that it follows harsh consequences. In our opinion the true construction of a charging provision including a pro­vision for charging penalty must receive the construction ruled by Rowlat, J. If a statute intends to impose a penalty or a charge it must be expressed in clear and unambiguous language. If the provision is reasonably clear the Courts have no juris­diction to mitigate harshness. However, if the provision is capable of alternative meanings, the Courts will lean in favour of the subject. If the provision is reasonably clear the Courts have no juris­diction to mitigate harshness. However, if the provision is capable of alternative meanings, the Courts will lean in favour of the subject. If the provision is so wanting in clarity, that no meaning is reasonably clear, the courts will be unable to regard it as of any effect. The sound general rule is that a penalty shall not be considered to be imposed without a plain declaration of the legislature. One is simply to go on the Act itself, to see that the penalty claimed is that which the Legislature has enacted. No penalty can be levied on any doctrine of "the substance of the matter" as distinguished from its legal signification, as a subject is not liable to penalty on "supposed spirit of law or by inference or by analogy." Lord Sumner observed in Ormand Investment Co. v. Belts. (1928) AC 143, 758) "the Crown does not tax by analogy but by statute". Dealing with the application of "the spirit of the law", in interpreting fiscal statute, Lord Reid observed in I. R. C. v. Sounders (1958) AC 285 - "It is sometimes said that we should apply the spirit and not the letter of the law so as to bring in cases which, though not within the letter of the law, are within the mischief at which the law is aimed. But it has long been recognized that our courts cannot so apply taxing Acts." All the principles of construction of taxing statute were considered by the Supreme Court in M/S Morarilal v. B.R. Vad, AIR 1976 SC 313 -1975 Tax L. R. 1363-37 STC 77 and the rule of construction has been laid down succinctly by Chandrachud, J. (as his Lordship then was). The rules stated by Rowlat J. in Cape Brandy Syndicate (supra) which had been approved and adopted by the Supreme Court in a number of cases has been accepted as the correct principle which is applicable in interpreting our taxing statutes. The rules stated by Rowlat J. in Cape Brandy Syndicate (supra) which had been approved and adopted by the Supreme Court in a number of cases has been accepted as the correct principle which is applicable in interpreting our taxing statutes. The relevant observations are extracted : "In that famous passage marked by a happy turn of phrase, Rowlatt J. said, 'there is no equity about a tax.' There is no presumption as to a tax.' There is no equity about a tax in the sense that a provision by which a tax is imposed has to be construed strictly, regardless of the hardship that such a construction may cause either to the treasury or to the tax-payer. If the subject falls squarely within the letter of law he must be taxed, howsoever inequitable the consequences may appear to the judicial mind. If the Revenue seeking to tax cannot bring the subject within the letter of law, the subject is free no matter that such a construction may cause serious prejudice to the Revenue. In other words, though what is called equitable construction may be admissible in relation to other statutes or other provisions of a taxing statute, such a construction is not admissible in the interpretation of a charging or taxing provision of a taxing statute.” [ Emphasis supplied by us. ] (6) In view of the nature and character of a penal provision it must be construed strictly regardless of the hardship that such a construction may cause either to the treasury or to the tax-payer. If a subject falls squarely within the letter of the law he must be penalised, howsoever inequi­table consequences may appear. If, however, the Revenue seeking to penalise a subject cannot bring him within the letter of the law, a subject will not be liable, no matter that such a construction may cause grave prejudice to the Revenue. Equitable construction is out of place in respect of a penal provision and such a construction is not permissible in inter­preting a charging provision of a taxing statute. The golden rule is that if the provision is capable of two alternative meanings the court should lean in favour of the subject; if the provision lacks in clarity that no meaning is reasonably clear the courts will be unable to regard it as of any effect, and, naturally the subject cannot be penalised. The golden rule is that if the provision is capable of two alternative meanings the court should lean in favour of the subject; if the provision lacks in clarity that no meaning is reasonably clear the courts will be unable to regard it as of any effect, and, naturally the subject cannot be penalised. This is precisely what has been ruled in a number of decisions of the Supreme Court including C. I. T. West Bengal vs. Vegetable Products, AIR 1973 SC 927 -(1973) 88 ITR 192 (SC). Bearing in mind' the above principles let us proceed to answer the question. (7) The entire line of reasoning of Mr. Talukdar is-grounded on an obiter dictum of the Gujrat High Court in C. I. T., Gujrat vs. R. Ochhavlal & Co., (1976) 105 ITR 518. Therein, Section 271(1) was divided into two distinct parts- clauses (a), (b) and (c) forming one division and clauses (i), (ii) and (iii) forming the other compartment-the former divi­sion classified as "creating penal liabilities" and the latter for quantifying the liability in terms of money. In other words clauses (a), (b) and (c) were treated as provisions for creating charges or penalties whereas clauses (i), (ii) and (iii) were held to be machinery for computation of penalty. In fact, the moot question that came up before the Gujrat High Court was the interpretation of the provisions of Sections 271(1)(c), 271 (2) and 274(2) of "the Act". The observations of the High Court touching Section 271(1)(a) and 271(1)(i) are obiter. But the 'dictum' is a view point. It is our obligation to scrutinize the view of the High Court. We should not side­track it by a casual observation that it is obiter. It is true that the High Court was inever invited to consider seriously the provisions of Section 271(1)(a) and Section 271(1)(i). We feel it unnecessary to deal with the provisions of Section 271(1) (b) (c) as well as Section 271(1) (ii) and (iii) and accordingly we leave them aside. Let us fathom whether the provi­sions of clause (a) by itself creates a penal liability. A parson is liable to penalty when he is subject to penalty, in other words, he is bound or obliged in law or responsible or charg­eable to penalty. Let us fathom whether the provi­sions of clause (a) by itself creates a penal liability. A parson is liable to penalty when he is subject to penalty, in other words, he is bound or obliged in law or responsible or charg­eable to penalty. Therefore, the crucial question is whether a person committing 'a default' contemplated in clause (a.) is bound or obliged in law or chargeable or responsible or liable to penalty. Clause (a) undoubtedly defines the nature and cha­racter of the defaults but the crux of the matter is whether a person committing such default is automatically liable to penalty? Is there any class of tax-payers exempted or exempted? Whether the defaults defined makes all such defau­lters "liable to penalty"? Failure to furnish returns contem­plated under clause (a), in our opinion, defines or enu­merates the nature or character of the wrongs or offences, but all such wrongdoers are not liable to penalty if we care­fully scrutinise clause (i). The clause clearly states who shall be chargeable to penalty as well as classifies persons who are not so chargeable or obliged in law to pay penalties. In the event of defaults enumerated in clause (a) a tax payer can be penalised if he is also in arrears to pay the amount of tax payable by him and has not paid up his "assessed tax" in the two specified methods of payments, namely, by way of (i) deduction at sources under Chapter XVII-B, or (ii) payment in advance under Chapter XVII-C at all relevant time. If a tax-payer commits default under clause (a) but pays up his arrears, by way of pay­ment of advance tax or deduction at the source he is not liable to penalty. It follows that a class of person who commits default under clause (a) cannot be "subject to penalty" if he has paid up the entire amount of tax and has paid up his "ass­essed tax" by one of the two methods recognised in the explan­ation to Section 271 (1) (i). They are not bound or obliged in law or chargeable or responsible to pay penalty. In our opinion, the provisions of clauses (a) and (i) must be read in unison to find out the persons bound or obliged in law to pay penalty. Penalty liability must be created by law. They are not bound or obliged in law or chargeable or responsible to pay penalty. In our opinion, the provisions of clauses (a) and (i) must be read in unison to find out the persons bound or obliged in law to pay penalty. Penalty liability must be created by law. We are of opinion that the liability to pay penalty can only be ascertained on proper scrutiny of the provisions of clause (a) read with clause (i) and not in a disjunctive manner. We hold that the pro­visions of clause (a) and clause (i) are provisions imposing penalty, but hasten to add that clause (i) incorporates comp­utation of penalty as well. We are unable to agree that clause (i) is a provision which merely quantifies "penal liability". In the result we hold that to determine whether a tax payer is liable to penalty it is necessary to read clauses (a) and (i) and, if all the conditions precedent for making a tax payer liable can be worked out, the person can be said to be obliged in law to penalty or liable to penalty. A person is liable to penalty if he commits double defaults-(i) fails to submit return without reasonable cause etc., and, (ii) does not pay up his tax in the manner provided in Section 271 (1) (i). A person who has had no arrear taxes and has duly paid up his assessed tax in advance under Cha­pter XVII(C) is exempted by law to pay any penalty; he is not "liable to penalty". In the instant case the tax-payer is 'a person who is not liable to penalty in terms of clauses (a) and (i) as he had complied with the provisions of clause (i), acid, as such cannot be termed as a person liable to penalty. In our view, the very structure of Section 271 (1) does not admit that clause (a) by itself creates "penalty liability" and clause (i) is merely a provision for quantifying the penal liability. We entirely agree with the view expressed in (1978) 113 ITR 99, Additional C. I. T., Madras vs. Murugan Timber Depot in so far as the interpretation of clauses (a) and (i) of Section 271 (1) of "the Act". We entirely agree with the view expressed in (1978) 113 ITR 99, Additional C. I. T., Madras vs. Murugan Timber Depot in so far as the interpretation of clauses (a) and (i) of Section 271 (1) of "the Act". We refrain from expressing any opinion about the interpretation of the High Court in respect of the other clauses of Section 271 (1), as they are not the subject-matter for our determination in the instant case. (8) If we analyse the question from another angle we arrive at the same conclusion. Wrongs or offences may be defined in one provision and penal liabilities pinpointed in the same or other provision of laws creating liabilities. Even after defining a wrong or offence, some persons are exempted from penal liabilities. It is to be found in the Indian Penal Code and other laws imposing penalties or creating liabilities. What impelled the law maker to grant the immunity is not for our consi­deration. If the subject does not fall squarely within the letter of law he cannot be penalised, howsoever inequitable the consequences may-appear to the judicial mind. However, there is a strong force in the submission of Dr. B. P. Saraf that a class of diligent tax-payer who has duly paid up all his taxes incl­uding the assessed tax in the manner and method provided in clause (i) has been exempted. The contention has a strong force but equitable construction has no place in interpreting a charging provision. (9) The view that we have expressed finds ample support from the observations of their Lordships- in C.I.T. vs. Veget­able Products (supra). While interpreting the provisions cont­ained in section 271 (1) (a) (i) their Lordships inter alia observed :- "......We are interpreting not merely a taxing provision but a penalty provision as well......" We are bound by the observation and hold that clauses (a) and (i) of Section 271 (1) are penal provisions insofar as they make a person liable to penalty. Accordingly, we are reluctantly impelled to state that we find it difficult to accept the view of the Gujrat High Court in Ochhavlal & Co. (supra) that the provis­ions of section 271 (1) (a) (i) are merely provisions for quant­ifying the penal liability and they do not create penal liability. Accordingly, we are reluctantly impelled to state that we find it difficult to accept the view of the Gujrat High Court in Ochhavlal & Co. (supra) that the provis­ions of section 271 (1) (a) (i) are merely provisions for quant­ifying the penal liability and they do not create penal liability. In Vegetable Products (supra), it has been held that a person who has duly paid up his tax in the manner provided u/s. 271 (1) (a) is not liable to penalty. On behalf of the Revenue it has been sub­mitted that clause (i) is exclusively applicable to persons other than registered firm. We find no force in the contention. Clauses (a) and (i) take within their folds all tax payers including registered firms. 10. The next contention of the learned counsel is to the inter­pretation of the provisions of section 271 (2) is not tenable in View of the interpretation that we have given in respect of the provisions of Section 271(1) (a) and section 271 (1) (i). In our opinion, the expression "the person liable to penalty" in Section 271 (2) refers to persons who are liable to penalty u/s. 271 (1) (a) read with Section 271 (1) (i). As alluded, a person is subject to penalty when an obligation is created by law or when a person is bound or obliged in law to pay penalty, The expression refers to the persons who are liable to penalty under sections 271 (1) (a)/271(1) (i) and no other person. Those exempted from liability to penalty cannot be described as "the person liable to penalty" under section 271 (2) of the Act. In the result, we hold that the expression "persons liable to penalty" means only those persons who are liable to penalty u/s. 271 (1) (a) and (i). We are not concerned with the persons governed by clauses (b), (c) and/or (ii) and (iii). In our opinion, if a person liable to penalty u/s. 271 (1) (a) (i) happens to be P registered firm his case squarely falls u/s. 271 (2) of "the Act". A registered firm is denuded of the advantages of registration when it is liable to penalty u/s. 271 (1). It takes the colour of an unregistered firm and the penalty imposable shall be the same as would be imposable on that firm if that firm were an unregistered firm. A registered firm is denuded of the advantages of registration when it is liable to penalty u/s. 271 (1). It takes the colour of an unregistered firm and the penalty imposable shall be the same as would be imposable on that firm if that firm were an unregistered firm. The penalty imposable shall be in the manner and method provided in Section 271 (1) (i). However, the quantum of penalty shall be computed in the manner laid down under clause (i), but the firm shall be asse­ssed and the penalty imposable as if it were an unregistered firm. 11. The learned Counsel for the Revenue submits that the non-obstante clause in section 271(2) over-rides the provisions of section 271 (1) (i) and if a person committing a default under Clause (a) is a registered firm, its case falls automatically under sub-section (2); in such an event it is not required to process the case via section 271(1)(i). The contention is not tenable for the following reasons: First, to attract the non-obstante Clause, the main sub-section must "be applicable. The liability of the person must be determined and in doing so, one is to look at the preceding sub-section (1). On due scrutiny of section 271 (1) (a) as well as Clause (i), if a person is liable and if it happens to be a registered firm, sub-section (2) is attracted. The conditions precedent for appli­cability of sub-section (2) are the two classes of defaults referred to in Section 271(1) (a) and (i). As sub-section (2) is applicable only to "person liable to penalty". Secondly, Section 271(1) (a) (i) does not exclude registered firms but incorporates "all persons''. One cannot skip over the relevant Clause (i) and jump to Section 271(1) to stamp the registered firm with liability in absence of any clear intendment expressed in the Section. Thirdly, we note that the provisions of sub-section (2) does not commence with the non-obstante Clause. If the sub-sections were structured "Notwithstanding anything contained in Clause (i) or in any other provision of the Act, a registered firm shall be liable to penalty if it commits any default con­templated under Section 271 (1)(a).............." or words to that effect, we could have given serious thought to the contention. However, that is not the structure of sub-section (1). Fourthly, the position of the non-obstante Clause in the middle of the Section is significant. However, that is not the structure of sub-section (1). Fourthly, the position of the non-obstante Clause in the middle of the Section is significant. The purpose of the non-obstante clause is limited. It is a sub-clause expressly empowering the authority to treat a registered firm as if it were an unregistered firm and, accordingly assess and impose penalty notwithstanding any other provisions like Sections 182 and 183. It is an express authorisation empowering the authorities to assess a firm in a different status which is essentially necessary to assess a tax in a different status and at a higher rates. It is an express empower­ment imposing harsh treatment and unless expressly provided, the penalty could not be imposed in such manner. It has been held in Luxmipat V, C.I.T., AIR 1959 SC 501 that unless otherwise expressly provided an income cannot be taxed twice. The non-obstante Clause is an empowering provision expressly providing imposition of penalty in a harsher manner. In absence of the non-obstante clause, the taxing machinery could not have treated a registered firm as if it were an unregistered one and to assess the firm in the status of an unregistered firm. Fifthly, the legal fiction created cannot be extended beyond the purpose for which it is created or beyond the language of the sub-section. After ascertaining the purpose of the non-obstante Clause, it should be carried to its logical conclusion to find the field of operation of the non-obstante Clause. We conclude that the non-obstante Clause-cum-legal fiction created in sub-section (2) is to make the machinery for computation of tax workable without any hinderance. 12. On behalf of the Revenue, reliance was placed on Nepali Restaurant V. C.I.T. (1979) 117 ITR 828 (830) (Karnataka). The registered firm was found liable to penalty under Section 271(1) and it was contended on behalf of the assessee that sub-section (2) was applicable only when a registered firm was not liable to pay tax. In other words, the contention was that Section 211(1) (i) applied only in case of registered firm "liable to pay tax". The contention was rejected by Venkataramiah, J. It was held that sub-section (2) was applicable to all registered firms including those not liable to pay tax. It is a case in which clause (i) was never the subject matter of determination of the High Court. We respectfully agree with the view expressed in Nepali (supra). The contention was rejected by Venkataramiah, J. It was held that sub-section (2) was applicable to all registered firms including those not liable to pay tax. It is a case in which clause (i) was never the subject matter of determination of the High Court. We respectfully agree with the view expressed in Nepali (supra). 13. As such, we hold that sub-section (2) is not attracted" in the instant case. The assessee does not fall squarely within' sub-section (2). Even if we consider the view expressed by the Revenue as "a reasonable view", it must be concluded' that the penal provisions are capable of alternative meanings and we are bound to lean in favour of the subject. If the contention of the Revenue is also a reasonable view we are constrained to hold that the penal provisions lack in clarity and on that ground alone the subject is entitled to benefit and cannot be penalised. However, we are firm that the view expressed by us is the only reasonable view. Upon the whole we answer the questions in the affirmative and against the Revenue. We hold that Section 271(2) is not applicable in the instant case and the tax-payer had no tax liability at all-relevant time for the assessment year 1963-64. We make no-order as to costs. 14. Let a copy of the judgment be sent under the seal of the court and the signature of the Registrar to the learned Tribunal which shall pass such orders as are necessary to dispose of the case conformably to the judgment.