TMI Blog1993 (11) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... income only on 1-3-1989, i.e., after a delay of 31 months with a covering letter as follows :--- "From M/s. Narayanan Co., Edappally. To The Asstt. Commissioner of Income-tax (Asst.), Investigation Circle, 1, Ernakulam. Sub :---Filing of Income-tax return --- Ref. PY 8289 --- Assessment year 1986-87--- Sir, We are filing herewith our return of income for the assessment year 1986-87. As we have misplaced and lost our account books and the same is found to be not traceable we are estimating our income on the basis of the total quantity of the arrack sold during the year. A statement showing the income estimated is filed along with the return. We have filed Form No. 12 on 30-7-1986 before the Income-tax Officer, D-Ward, Circle-I, Ernakulam. A true copy of the application for continuation of registration in Form No. 12 filed before the Income-tax Officer, D-Ward, Circle-I. Ernakulam is filed herewith. Your ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partner is Shri P.K. Narayanan, having 30% share in profits and losses was one of the accused in a criminal case. He was arrested on 29-11-1986 and was produced before the Chief Judicial Magistrate on 30-11-1986 and he was in custody till 9-3-1989. He was granted bail with a specific direction that he shall not enter the limits of Districts of Ernakulam and Kottayam except for the purpose of attending the court in connection with the case and he was directed to report before the Dy. Superintendent of Police, Trichur, every fortnight. The case was entrusted to the CBI by the Hon'ble High Court of Kerala which was upheld by the Supreme Court as per its order dated 14-2-1986. When the matter was entrusted to the CBI, the CBI moved the High Court to cancel the bail granted to the accused. The High Court has ordered in Criminal M.C. 533/1987 dated 10-8-1987 that the first respondent, Shri P.K. Narayanan, be arrested and committed to the custody. It was further directed that the Sessions Judge dealing with the trial of his case was free to order his release on bail after completion of the examination of the principal witnesses for prosecution, on such conditions as he deems fit. The com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, the return was signed by Shri Krishnalal, the son of Shri P.K. Narayanan and one of the partners of the assessee-firm. Further the income of the assessee was estimated. Hence, the ground that the return was not filed since some of the accounts were lost or misplaced will not lie. Notice under section 148 was issued to the firm on 18-11-1987 which was served upon the assessee on 20-11-1987. The assessee did not care to file the return of income. Again notice under section 142(1) was also issued on 31-3-1988 and 30-5-1988 posting the case on 10-6-1988. For evidence, further notice under section 142(1) was again issued on 4-11-1988 posting the case to 14-11-1988. All these opportunities were not availed of by the assessee. Hence the explanation offered by the assessee will not be a sufficient cause for delay and the penalty has to be sustained. 6. Thus. we have heard rival submissions. The only point that arises for our consideration is whether there was any reasonable cause for the delay of 31 months in filing the return of income for the assessment year 1986-87. Admittedly, the assessee is a partnership firm consisting of six partners. Their names and respective shares in prof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g else. The argument that in the absence of Shri Narayanan, any of the partners could have filed the return of income as envisaged under section 140(cc) is also not available for the reason that his wife and son were cited as witnesses for the prosecution. Further it is reasonable to hold that the investigations against Shri Narayanan leading to his arrest and trial for murder might have caused great agony, tension, stress and strain to the wife and son who were partners-cum-prosecution witnesses. It has not been shown that the other partners outside the family of Shri Narayanan were actively engaged in the conduct or management of the business of the firm, such as to ascertain to its income for purpose of filing the return of its income though under clause 12 of the partnership deed the firm can be represented by any of the partners. 7. Moreover the assessee had been consistently pleading before the Assessing Officer right from the stage of filing of the return that its books for the impugned assessment year were either lost or misplaced and were not traceable. The case of the department is that the explanation of the assessee was not true. We have carefully considered the submi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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