1977 (2) TMI 36 - AT - Income Tax

Summary

Issues:
- Confirmation of penalty under section 271(1)(a) for late filing of income tax return for assessment year 1969-70.
- Reasonable and sufficient cause for belated filing of the return.

Analysis:
1. The appeal was against the confirmation of a penalty of Rs. 6,008 under section 271(1)(a) for the late filing of the income tax return for the assessment year 1969-70. The Appellate Assistant Commissioner upheld the penalty imposed by the Income-tax Officer. The grounds of appeal by the assessee challenged the imposition of the penalty and argued that there was a reasonable cause for the delay in filing the return.

2. The assessee, a private limited company, filed the return of income for the assessment year 1969-70 on 5th June 1970, over 8 months after the due date of 30th Sept 1969. The Income-tax Officer imposed the penalty due to the delay, which was later confirmed by the Appellate Assistant Commissioner.

3. The Income-tax Officer found the explanation provided by the assessee regarding the delay in filing the return unsatisfactory. The assessee cited labor trouble and non-receipt of payment as reasons for the delay. However, the authorities did not find these reasons compelling enough to justify the delay.

4. In the appeal before the Appellate Assistant Commissioner, the assessee reiterated their reasons for the delay, including labor trouble and delayed completion of the audit. However, the Appellate Assistant Commissioner was not convinced by these explanations and upheld the penalty.

5. During the hearing, the counsel for the assessee argued that labor trouble and delayed audit completion were reasonable causes for the delay in filing the return. The Departmental Representative relied on previous decisions to argue against the assessee's contentions.

6. The Tribunal analyzed the facts and submissions from both sides. It acknowledged the labor trouble faced by the assessee but found that it could not have contributed significantly to the delay. The Tribunal considered the delayed completion of the audit as a crucial factor. It criticized the arbitrary manner in which the Appellate Assistant Commissioner handled the explanation regarding the audit delay. The Tribunal concluded that the delay in the audit completion was a plausible reason for the delay in filing the return and canceled the penalty.

7. Ultimately, the Tribunal allowed the appeal, canceling the penalty imposed on the assessee for the late filing of the income tax return for the assessment year 1969-70.