1977 (2) TMI 26 - AT - Income Tax

Summary

Issues:
1. Rejection of application under s. 146 of IT Act, 1961.
2. Compliance with notice under s. 142(1) and 143(2) of the IT Act.
3. Justification for not furnishing particulars of partners residing in a different location.
4. Appeal against rejection of application under s. 146 of the IT Act.

Analysis:
1. The assessee, a registered firm with four partners, disputed the rejection of its application under s. 146 of the IT Act. The Income Tax Officer (ITO) issued notices under s. 142(1) and 143(2) in July 1974, requesting information. Despite the assessee's detailed reply, the ITO passed the assessment order in February 1975, citing non-compliance under s. 142(1) and determining the income at Rs. 80,000. The assessee applied under s. 146, which was rejected by the ITO.

2. The assessee appealed to the Appellate Assistant Commissioner (AAC), arguing compliance with the notice under s. 142(1). The AAC acknowledged the reply submitted by the assessee but upheld the rejection, stating non-compliance with the ITO's notice under s. 142(1).

3. The assessee contended that it had complied with the notice under s. 142(1) and 143(2) by submitting detailed replies. The ITO requested particulars of the partners in a specific format, which the assessee couldn't provide promptly as the partners resided in Calcutta. The assessee argued that due to this genuine difficulty, it was prevented from furnishing the required details in time, justifying its application under s. 146.

4. The Departmental Representative supported the lower authorities' decisions, emphasizing the assessee's failure to comply with the notices and provide a valid reason for the delay. However, the Tribunal observed that the assessee had indeed responded to the initial notice within the stipulated time but faced challenges in obtaining partner details due to their location. Consequently, the Tribunal accepted the assessee's application under s. 146, directing the ITO to reassess the income.

In conclusion, the Tribunal allowed the appeal, finding in favor of the assessee based on the genuine difficulty faced in providing partner details and the timely compliance with the initial notice under s. 142(1) of the IT Act.