TMI Blog2002 (11) TMI 322X X X X Extracts X X X X X X X X Extracts X X X X ..... no return was filed for the assessment year under consideration under section 139(1) of the Act. Subsequently, the return was filed in response to the notice under section 148 of the Act on 10-9-1991 declaring a loss of Rs. 69,680. It is stated, in the course of assessment proceedings, the assessee agreed to surrender certain sundry creditors and hence it agreed to be assessed at an income of Rs. 2,59,628. The Assessing Officer initiated penalty proceedings under section 271(1)( a ) of the Act for late filing of the return. According to him, the return was due to be filed on or before 31-7-1986. Thus, there was a delay of 61 complete months. The Assessing Officer issued a show cause notice to the assessee and after considering the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble ITAT Jaipur Bench held that when the assessee was under the bona fide belief that her income was not taxable, there was no case for penalty under section 271(1)( a ) for not filing the return inspite of service of notice under section 139(2). Hon ble Gujarat High Court in the case of Smt. Ramalaxmi Jivrag v. CWT Rajkot [1982] 138 ITR 731. "That the AAC had come to the conclusion that the failure of the assessee to furnish the return of net wealth was not reasonable because the assessee s net wealth in each of the assessment years was not taxable and as this has important bearing on the question of levy of penalty, the Tribunal ought to have examined whether or not the assessee s net wealth was taxable in the light of the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which cannot be proved and there is no finding that the assessee acted in any way mala fide in showing the income as it did in its return, the Appellate Tribunal was justified in holding that there was no obligation on the assessee to file the return of income under section 139(1) of the Income-tax Act, 1961, since the income returned was below the taxable limit notwithstanding that the assessed income was chargeable to tax and on this ground, to hold that no penalty was leviable under section 271(1)( a ) of the Act." 7. Besides, there are number of other decisions which support the case of the assessee that the penalty is not exigible. Considering, therefore, the facts and the various decisions on the point, this is a case where the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rds, there was no income liable to tax due to the loss suffered. Thus, the assessee was prevented by sufficient cause from filing the return voluntarily under section 139(1) of the Act. In our view, the learned CIT(A) had correctly appreciated the facts of the present case and, therefore, his order does not require any interference at this level. We, therefore, considering the entire facts, as discussed above, do not find any infirmity in the order of the learned CIT(A) and accordingly the same is upheld. 5. In the result, the appeal is dismissed. ORDER 1. This is an appeal by the Department and is directed against the order of the CIT(A), Jalandhar dated 16-9-1994 in deleting the penalty of Rs. 2,48,887 levied by the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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