1981 (1) TMI 96 - AT - Income Tax

Summary

Issues:
Late filing of income tax returns by the legal representative of the deceased assessee leading to penalty imposition under section 271(1)(a) of the Income Tax Act.

Analysis:
The deceased assessee, a resident of Kanpur, passed away in June 1962, leaving his widow, the appellant, and minor children. The income tax returns for the years 1961-62 and 1962-63 were filed late by the legal representative on 25th Jan. 1966. The Income Tax Officer (ITO) issued show cause notices for the delayed filing, resulting in penalties of Rs. 14,710 and Rs. 18,762 for the respective assessment years. The matter was appealed before the Appellate Assistant Commissioner (AAC), who partly allowed the appeal for the year 1961-62 but upheld the penalties for 1962-63. The legal representative then appealed to the Appellate Tribunal, arguing that the delayed filing was due to reasonable causes.

The legal representative contended that after the death of the assessee, she was initially in shock and later took steps to settle the tax liability, including obtaining a succession certificate and voluntarily informing the tax department. The Tribunal noted that the legal representative had valid reasons for the delay, such as the short period of married life, responsibilities, and the need to secure funds left by the deceased to clear the tax liability. The Tribunal observed that even the interest charges for previous years had been waived due to sufficient cause shown by the legal representative. Consequently, the Tribunal agreed that the delayed filing was justified by reasonable causes and held that the penalties were not applicable in this case.

Therefore, the appeals by the legal representative of the deceased assessee were allowed by the Appellate Tribunal.