TMI Blog2008 (5) TMI 353X X X X Extracts X X X X X X X X Extracts X X X X ..... ' hereinafter) in view of the facts and circumstances of its case. 4.1 The facts in brief are that the assessee, an individual, filed his return of income for the year on 31st Dec., 2004, i.e., nine months after the close of the relevant assessment year, even as the due date of filing of return under s. 139(1) in his case, as it appears, is 31st July, 2003 or, in any case, 31st Oct., 2003. Penalty proceedings under s. 271F, i.e., for failure to furnish the return of income by the close of the assessment year, were initiated. The assessee explained that its return was in any case within the time allowed under s. 139(4) of the Act, so that being a valid return, penalty under s. 271F could not be levied. Further, he is a working partner in M/s Prakash Products, Nasik, dealing in Pan Masala products, which stood banned by the State Government of Maharashtra, so that the said business had to be closed. It was on account of these disturbances that he had to stay out at Nasik, and could not, therefore, attend to his other obligations, including the filing of return of income, leading to delay therein. As such, a reasonable cause, within the meaning of s. 273B of the Act, existed in its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to show mens rea or absence of a culpable mental state for the levy of penalty. Once the assessee is not able to show reasonable cause for the admitted default, penalty becomes exigible. (D) The assessee has declared income in the return under two heads of income, i.e., 'Capital gains' and 'Income from other sources', paying substantial portion of tax by way of self-assessment tax, so that the assessee's belief that the return stood delayed because of the loss caused in the firm, M/s, Prakash Products, which is even otherwise tax neutral, did not hold. Under the circumstances, he was of the view that there was no reasonable cause for the assessee to have defaulted under s. 271F and that the penalty of Rs. 5,000 stood correctly levied thereunder. Aggrieved, the assessee is in appeal. 5. Before us, the assessee has again preferred to rely on written submissions, while the learned Departmental Representative relied on the orders of the authorities below. 6. We have heard the parties before us, and perused the material on record. 6.1 We shall first briefly recount the provision of s. 271F of the Act, which seeks to penalize the assessee with a sum of rupees five thousand wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prefers to file his personal returns of income under the Act at Mathura, his native place, even as he resides and pursues his vocation as a businessman, at Nasik, under the auspice of a partnership firm thereat, as its sole working partner, which is subject to the Act, besides other Central and Provincial laws, so that he is only ably guided by counsel, and the relevant provision of law (s. 271F) is on the statute since 1st Oct., 1998. Further, would that therefore imply that had he been aware of the provision of s. 271F, he would have filed the return in time or by the close of the assessment year? So that the said argument, even presuming his unawareness of the provision is self-defeating and contradicts his case of being prevented by reasonable cause in doing so. Also, his plea of there being no loss to the Revenue due to the delayed filing of return is also not valid, being not relevant for the purpose of levy of penalty under s. 271F. 6.3 The consideration of existence of mens rea is also absent for the purpose of levy of penalty under s. 271F of the Act, even as clarified by the decisions of the Hon'ble High Courts, viz., as listed at para 4.2(C) above, and which is only r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whose business stood closed down, was therefore even otherwise, i.e., independent of this development, required to be, and actually staying, only at Nasik for looking after the said business. In fact, that was the usual and regular practice as far as he was concerned and, as it appears, for the past several years. Secondly, the sale of the land, which is stated to have been sold to raise finances for the said business, stood completed latest by the close of the relevant previous year, i.e., 31st March, 2003. As such, it would only imply that the substantial formalities in relation to the closure of the business stood completed by that date. Thus, ascribing the delay to the said closure; the return having been furnished only on 31st Dec., 2004, i.e., at least 21 months or almost two years after the said sale, and even after the expiry of the due date for the furnishing of the return for the immediately succeeding year, is not comprehensible, particularly considering that the assessee has not stated anything in definite terms as regards his commitments which could be or stood completed only after 31st March, 2003, emphasizing their time aspect, and which thus prevented him from furn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al movement. 6.7 It is only the information along the foregoing lines which would form the edifice of, and establish, the assessee's case of existence of reasonable cause, the onus to prove which is on him. This is all the more so as, as evident, the closure of the business stood substantially completed prior to 31st March, 2003, and all the relevant information required for the purpose of filing the return had crystallized by that date. As such, a further delay of 21 months, return having been filed on 31st Dec., 2004, is not explained on the basis of the dislocation caused due to closure of the said business, even the date of which remains unspecified, and whereby the assessee has, suffered a financial loss of Rs. 2.02 lacs. Even if the assessee has remained at Nasik, searching for alternate avenues of income, need for which is only understandable, though can only be taken into account where pleaded, that still would not explain the delay in its case. 7. Under the circumstances, and in our foregoing discussion of the factual and legal aspects of the case, we are of the view that the assessee has not been able to show, much less, prove, any reasonable causers) for not furnishi ..... 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