appeal by revenue is that Commissioner (Appeals) erred in accepting contention of assessee that at relevant time, assessee entertained bona fide belief that it was not obliged to file estimate under section 212(3A) of Income-tax Act, 1961 ('the Act') and that constituted reasonable cause for failure to furnish estimate under section 212(3A) of and thereby Commissioner (Appeals) erred in canceling penalty levied by ITO under section 273(c) of Act. 2. ITO in his order mentioned that under section 210 , ITO asked assessee to pay advance tax of Rs. 1,85,044 which was calculated by him on basis of total income (Rs. 2,87,480) assessed for assessment y e r 1967-68 which was latest regular assessment. year under consideration was 1971-72. advance tax demand was payable in three instalments, i.e., 15-9-1970, 15-12-1970 and 15-3-1971. In compliance therewith, assessee paid two instalments. On 17-2-1971, order under section 210 of Act was revised under section 210(3) purportedly on basis of tax paid under section 140A of Act for assessment year 1970-71. ITO also mentioned that according to revised order, total advance tax payable was at Rs. 9,22,366 and after deducting tax already paid, i.e., Rs. 1,23,362, balance tax payable was at Rs. 7,99,004. assessee was required to pay this amount by 15-3-1971. 3. ITO mentioned that assessee by its letter dated 1-3-1971 informed ITO that amended order under section 210 could be passed on basis of tax paid under section 140A and not on basis of tax payable under section 140A. It was also submitted that tax under section 140A for assessment year 1970-71 was not paid before 17-2-1971. In circumstances, i t was contended that order under section 210 was bad in law and demand notice was invalid. On 19-3-1971, assessee addressed in another letter to ITO pointed out to validity of original order under section 210 i n background of relevant provision of law and contended that s i d order was bad in law and accordingly, assessee was under no obligation to pay last instalment which would be due on 15-3-1971. But assessee assured that as gesture of goodwill, last instalment would be paid which was done on 15-3-1971. 4. return was filed on 15-10-1971 with income of Rs. 21,47,880. ITO started proceedings under section 273(c) and show-cause notice was issued to assessee asking why penalty should not be imposed for assessee's failure to furnish without reasonable cause estimate of advance tax under section 212(3A). 5. assessee submitted that there was no valid demand under section 210 and there was no obligation to furnish estimate under section 212(3A). It was contended that as per demand under section 210 dated 3-8-1970, same was raised on basis of latest completed assessment for assessment year 1967-68 wherein total income was assessed at Rs. 2,87,840. It was pointed out that assessee filed returns for assessment years 1968-69 and 1969-70 and paid tax thereon under section 140A before demand of advance tax was raised for first time on 3-8-1970. It was noted that as return for assessment year 1969-70 was filed on 31-3-1978 showing income of Rs. 4,14,313 and as tax under section 140A was paid on 3-4-1970 demand for financial year 1970-71 should have been based on returned income for assessment year 1969-70 in accordance with provisions of section 209(d) (i) of Act. 6. It was also contended that assessee was under bona fide belief that notice of demand under section 210 being not in accordance with law, therefore, assessee was not under any obligation to file estimate under section 212(3A). It was, therefore, contended that there was reasonable cause for not filing estimate. 7. ITO considered submissions made before him, but he noted that order under section 210 dated 3-8-1970 was not bad in law, nor demand made in pursuance thereof was invalid. He observed that it may be that there are some procedural mistake in calculating tax and that in fact, demand was, according to assessee, for lesser amount. He pointed out that assessee accepted that order and paid two instalments of advance tax in compliance with order under section 210 dated 3-8-1970 and, hence, if there was any irregularity in order, assessee waived same on its own and acted in compliance with order. He, therefore, was of view that contention of assessee for non-filing of estimate of advance tax was not tenable. He was, therefore, satisfied that assessee had failed to furnish estimate of advance tax under section 212(3A) without any reasonable cause. He directed that Rs. 1 lakhs should be paid by assessee by way of penalty under section 273(c). 8. assessee took up matter before AAC at first instance reiterating similar contentions. assessee placed reliance on decision of Hon'ble Allahabad High Court in case of Chitra Cinema v. ITO [1968] 68 ITR 877. AAC on reasons recorded by him cancelled penalty. Thereafter, revenue took up matter before Tribunal. Tribunal amongst other things observed that basic requirement of section 209(1) (a) was satisfied and as such, order under section 210 could not be held to be bad in law and having regard to very high income returned by assessee in this year, Tribunal observed that obligation of assessee to file estimate under section 212(3A) was there. Tribunal, therefore vacated said order of AAC and restored appeal to his file for considering question of imposition of penalty on merits and for disposal of assessee's other grounds of appeal that there being reasonable cause for not furnishing estimate and also for considering quantum of penalty. Hence, appeal was taken up by present Commissioner (Appeals) whose order is impugned before us. He noted that assessee on earlier order of Tribunal has taken reference to Hon'ble High Court raising question whether Tribunal was correct in holding that there was no invalidity in imposition of penalty under section 273(c) on ground that demand raised under section 210 was not illegal. 9. Before Commissioner (Appeals), assessee submitted written explanation to effect that ITO has failed to adduce any reason as to why assessee was required to file estimates and although ITO did mention in his order that assessee filed return of income on 15-10-1971 showing income of Rs. 21,47,880, which fact by itself would not lead to inference that assessee was under obligation to file estimate under section 212(3A). It was also contended that ITO made no attempt to ascertain whether tax payable on current income was likely to exceed advance tax demanded by more than one-third of demand and in absence of such investigation, ITO erred in inferring that assessee's case fell within mischief of section 273(c) relying on decision in case of P. V. Kurian v. ITO [1961] 43 ITR 432 (Ker.). 10. It was also contended that such penalty could not be imposed if I T O satisfied that assessee failed to furnish estimate of advance tax without reasonable cause. It was pointed out that similar expression 'without reasonable cause' appears in section 271(1) (a), 271(1) (b) and 271(1) (c) of Act. It was contended that there can be no dispute that when prosecution was launched for offence under section 276(b) of Act, mental element would be relevant. It was thus argued that while considering provisions of section 273(c) , mental element can not be ruled out and levy of penalty is mere concomitant of failure to file estimate of advance tax. assessee also relied on observation of Hon'ble Supreme Court in case of Hindustan Steel Ltd. v. State of Orissa [1972] 83 ITR 26. assessee submitted that as there being no validity order under section 210(1) or section 210(3) , it had no obligation to file estimate under section 212(3A) and this point did involve controversial issue and Tribunal admitted that there was controversy when it referred to question under section 256(1) of Act as mentioned earlier. It is, therefore, argued that assessee cannot be said to have taken frivolous contention merely for purpose of avoiding liability to pay advance tax. It was argued that assessee entertained bona fide belief that it was not liable to file estimate under section 212(3A). assessee placed reliance on decision in Y. Narayana Chetty v. ITO [1959] 35 ITR 388 (SC), Chitra Cinema's case (supra), Addl. CIT v. I. M. Patel & Co. [1977] 107 ITR 214 (Guj.) (FB) and Addl. CIT v. Ranjitsinhji Oil Mills (P.) Ltd. [1976] 103 ITR 405 (Guj.). 11. Commissioner (Appeals) considered submission raised by assessee from various angles. He pointed out that case relied on by assessee in P. V. Kurian's case (supra) it was held that for mere disparity between estimate by assessee and income returned or final final assessment made by ITO, no inference of dishonesty could necessarily be drawn as matter of law. Commissioner (Appeals) declined to accept this contention in view of another decision in case of Kashmir Vastralaya v. this contention in view of another decision in case of Kashmir Vastralaya v. CIT [1978] 112 ITR 630 (Pat.). He, therefore, declined to accept contention of assessee on this aspect. 12. Commissioner (Appeals) also considered contention of assessee that at relevant time, assessee had bona fide belief that it was not to file estimate under section 212(3A) because notice under section 210(1) or 201(3) was not valid in law. According to assessee, it was reasonable cause for which no penalty is attracted. Commissioner (Appeals) observed that after considering sequence of events as well as legal position in this regard, he found force in assessee's submission. He was of view that obligation for finding estimate under section 212(3A) is cast on assessee who had been served with notice under section 210. In other words, service of valid notice under section 210 is condition precedent to the obligation to file estimate under section 212(3A). He observed that it was substantive right of assessee to insist that he should be served with valid notice before he is exposed to hazards of consequence following, relying on decision of Hon'ble Supreme Court in case of Y. Narayana Chetty (supra). Further reference was made to decision in CIT v. Ramsukh Motilal [1955] 27 ITR 54 (Bom.) and R. K. Das & Co. v. CIT [1956] 30 ITR 439 (Cal.). decision appearing in Chitra Cinema's case (supra) was also considered, portion of which was reproduced in order of Commissioner (Appeals). It was noted that assessee had clear belief that both original notice as well as revised notice under section 210 were not issued in accordance with law and assessee was not required to comply with legal requirements of filing estimates under section 212(3A) , flowing from two bad notices. Commissioner (Appeals) pointed out that assessee did write letters to ITO before 15-3-1971 when ITO could rectify bad notices. He noted that ITO did not act on these letters and this only would have given credence to assessee's belief that it was not to comply with those notices. It was also noted that it was important aspect of this case that assessee did not intend to take unfair advantage of two bad notices under section 210 but contemporaneously wrote letters to ITO clarifying stand. Commissioner (Appeals) observed that if ITO made mistake in issuing notice under section 210 and of assessee honestly held belief that such notice was bad and, accordingly, which will not make him liable for filing enhanced estimate under section 212(3A) and also in absence of ITO to reply, then what assessee was doing, was only acting in bona fide manner. Commissioner (Appeals) pointed out that if assessee had not written these two letters and had kept belief confined to itself, then it was for assessee to show that such belief existed. He pointed out that in present case assessee not only entertained such belief but intimated such belief to ITO which can be said to be in good faith. He, therefore, noted that it cannot be said that belief entertained by assessee in case was frivolous or mala fide. Commissioner (Appeals) also referred to observation of Hon'ble Supreme Court in case of Hindustan Steel Ltd. (supra). 13. He pointed out that ITO referred to fact that by its conduct in paying three instalments on basis of order under section 210 dated 3- 8-1970, assessee waived irregularity in order. commissioner (Appeals) found that this observation has no sequence as there is authority on proposition that any agreement or arrangement would enstop either party even if it has been acted upon in past. Reference was made to decision in CIT v. V. MR. P. Firm [1965] 56 ITR 67 (SC) and Bar, Das, Dey & Co. v. Sri Sri Ishwar Tarakeshwar Sib Thakur Jiu, Shebait Mohant Srimat Dandiswami Hrishikesh, Ashram AIR 1969 Cal. 565. According to Commissioner (Appeals), fact of assessee having made payment of Rs. 1,84,044 would be inconsequential. 14. Accordingly, Commissioner (Appeals) accepted assessee's contention that at relevant time, assessee entertained bona fide belief that it was not obliged to file estimate and that would constitute reasonable cause for failure to file estimate under section 212(3A). He, therefore, canceled penalty order passed by ITO. Hence, this appeal by revenue. 15. It is submitted by learned departmental representative that Commissioner (Appeals) erred in accepting mere contention of assessee that there was bona fide belief that assessee was under no obligation to file estimate on belief that notice under section 210 was invalid. It was urged that notice under section 210 was not bad in law. It is pointed out by learned departmental representative that invalidity or otherwise of notice under section 210 was dealt with by Tribunal as mentioned earlier and, hence, this contention of assessee would no longer be available to Commissioner (Appeals) for basing his inference or conclusion, as it was done in present case. It is submitted that only issue submitted to Commissioner (Appeals) was for considering demerits of case and existence of reasonable cause. It is stressed that Commissioner (Appeals) had no more scope of examining or dealing with validity or otherwise of notice under section 210. It is submitted further that assessee by its own conduct did not show that there was such bona fide belief inasmuch as assessee paid instalments as demanded and so there was no misapprehension of law by assessee, as alleged. It is argued that if assessee had such doubt, then how payments were made. It is pointed out that second notice referred to earlier was not acted upon. It is argued that in penalty order itself basic facts of case have been brought out which would show beyond doubt that assessee had no reasonable cause for failure to file estimate under section 212(3A) in circumstances of case. It is submitted, therefore, that order of Commissioner (Appeals) may be reversed and that of ITO may be restored. 16. On behalf of assessee learned counsel, on other hand, supports order of Commissioner (Appeals). provision of section 212(3A) were emphasised. points mentioned by assessee in letters referred to earlier are highlighted by assessee's learned counsel at time of hearing. It is argued that assessee had bona fide belief in circumstances of case that it had no obligation to file enhanced estimate. It is pointed out that even Tribunal referred point to Hon'ble High Court under section 256(1) in respect of validity or otherwise of such demand notice as pointed out earlier. It is urged that in such situation Commissioner (Appeals) was justified in holding that assessee acted in bona fide manner. points raised before Commissioner (Appeals) are also reiterated before us. It is submitted vehemently on behalf of assessee that assessee genuinely entertained such belief and that was why no estimate under section 212(3A) was filed. It is urged at length that in circumstances of case, order of Commissioner (Appeals) was justified and same may be sustained. 17. We have gone through orders of authorities below for our consideration along with various submissions made before us. On behalf of assessee, copy of statement of case for assessment year 1971-72 as earlier mentioned, has been placed before us. assessee also points out that in similar situation in case of Adinath Chandra Seal & Co. [IT Appeal No. 1651 (Cal.) of 1982 dated 3-11-1983], Tribunal has cancelled penalty as Tribunal held that assessee on facts of that case, had reasonable cause for not filing estimate under section 212(3A). contention of assessee is that facts of that case were similar to those of assessee. We have gone through those orders of Tribunal also for our consideration. As mentioned earlier, Tribunal has given clear finding that notice under section 210 was not bad in law as basic requirement of section 209(1) (a ) was satisfied. It is also noted that having regard to very high income returned by assessee in this year, obligation to file estimate was there. Tribunal vacated orders of then AAC, but restore mater to file of first appellate authority for dealing with case of assessee on merits. case of revenue is that assessee had no reasonable cause for failure to file estimates under section 212(3A) particularly in view of fact that notice under section 210 cannot be said to be invalid even at relevant point of time when assessee wrote two letters to ITO. ground of contention of assessee that such notices were not valid, was mentioned in those letters which were noted by authorities below in their respective orders. contention of assessee, on other hand, was that even at that very point of time, assessee pointed out such irregularity or invalidity of orders of demand under section 210 and that was why assessee entertained bona fide belief that it had no obligation to file estimate as mentioned above although gesture of goodwill, assessee paid third installment within time. contention of assessee that by paying installment would not by itself validate invalid notice and ITO could not have taken advantage of payment or honesty of assessee. 18. It is true that penalty cannot be imposed for technical or venial breach of law as contended. But, here in instant case, it appears that penalty had not been imposed for any technical or venial breach of law. On contrary, it was assessee who contends that since notice under section 210 was not valid, assessee had no obligation to file estimate under section 212(3A) while at same time assessee did make payments of advance tax and that too, within stipulated time. In other words, assessee took advantage of that technical point, if at all, in order to say that since notice under section 210 was invalid, there was no further obligation on part of assessee to comply. Yet, on other hand, assessee admittedly paid third installment notwithstanding. In fact, this very issue was pointed out by Tribunal in its earlier order that basic requirement of section 209(1) (a) in instant case was satisfied. Though this finding was given by Tribunal subsequently, it had to be considered that there was position at relevant point also as far as present proceedings are concerned. It cannot be said that notice under section 210 became valid only after order of Tribunal. True, such conclusion is referable question, but by itself it cannot be said that assessee entertained bona fide belief that there was no obligation to file estimate as notice was not valid. Commissioner (Appeals) pointed out that in circumstances of case, it cannot be said that belief entertained by assessee was frivolous or mala fide. On reasons mentioned above, we fail to agree with his conclusion. It is also argued that since AAC at first instance, accepted claim of assessee that notice issued by ITO was invalid, which fact would also indicate that what assessee entertained regarding invalidity of notice, was bona fide belief. This contention does not appeal to us in view of reasons and discussions made by us earlier. 19. True, in similar situation in case of Adinath Chandra Seal & Co. (supra) Tribunal cancelled penalty under section 273(c) as it found that assessee had reasonable cause for not filing estimate under section 212(3A). But facts of that case were difference as notice under section 210 was not found valid and cannot be acted upon. On contrary, Tribunal in instant case found notice under section 210 was valid. Hence, decision of Tribunal in case of Adinath Chandra Seal & Co. (supra) does not help case of assessee, even otherwise. Besides, assessee's contention is that it acted bona fide in circumstances of case in not filing appeal. Reference is made to case of Hindustan Steel Ltd. (supra). facts of present case of assessee were distinguishable. True, assessee paid instalments of advance tax and on that fact alone, it cannot be said that by such payments invalid notice under section 210 became valid or it cannot be said that assessee has waived irregularity, which notice was found to be valid factually even by Tribunal as mentioned above. It cannot also be said that since notice was invalid according to assessee, payments by assessee also were invalid, which again is not correct as credit for such payments were already given in computation of tax. 20. It may be mentioned that before Commissioner (Appeals), assessee contended that expression 'without reasonable cause' appears in section 271(1) (a), 273(c) and 276(b ). stand taken by assessee that there can be no dispute that prosecution was launched for offence under section 276(b) , mental element would be relevant and expression 'without reasonable cause' should also have same meaning and while considering provision of section 273(c) and mental element cannot be ruled out. In this connection it would be useful to refer to decision of Hon'ble Kerala High Court of Full Bench in case of CIT v. Gujarat Travancore Agency [1976] 103 ITR 149 in which amongst other things and on facts of that case, it was held that penalty provision under Act and not as provisions of criminal nature which warrant requirement of mens rea in sense in which same is required for offence by criminal. It was also held that before imposition of penalty under section 271(1) (a) mens rea need not be established. Similar is view of Hon'ble Andhra Pradesh High Court of Full Bench in case of Addl. CIT v. Dargapandarinath Tuljayya & Co. [1977] 107 ITR 850. Similar was view as expressed in decision in case of H. H. Maharani Sharmishthabai Holkar v. Addl. CIT [1981] 129 ITR 13 (MP) in which it was held that there is no material difference in language of section 271(1) (a) n d 273(c ) regarding non-requirement of mens rea. It was held also in Madhya Pradesh High Court case that for purpose of section 273(c) , element of mens rea is not required to be considered. 21. Of course, in case of Jaipur Udyog Ltd. v. CIT [1969] 71 ITR 799 (SC), it was held that on invalid provisional assessment, advance tax demand under section 210 was also to be invalid. But in instant case, validity of notice under section 210 was sustained by Tribunal. penalty in case of this assessee has not been based merely on rejection of assessee's explanation, but on facts and in circumstances of case noted earlier as discussed in orders of authorities below. 22. decision relied have been rendered in circumstances of those cited cases, which were different from those of assessee. 23. Having regard to various submissions made before us and after considering different decisions cited and considered by authorities below and as discussed by us above and having regard to circumstances, we cannot subscribe to view of Commissioner (Appeals) in instant case. We cannot, therefore, sustain his order. Accordingly, his order is reversed and that of ITO is restored. 24. In result, appeal by revenue is allowed. *** INCOME TAX OFFICER v. MACHINE TECHNO (SALES) (P) LTD.