TMI Blog1965 (4) TMI 133X X X X Extracts X X X X X X X X Extracts X X X X ..... nuary 12, 1954. The late karta of the family, Vriddachala Reddiar, failed to comply with the notice served upon him under section 22(2) of the Act. Two proceedings were simultaneously set on foot, one of which was an application under section 27 of the Act for cancelling the assessment. This application was dismissed by the Income Tax Officer on July 2, 1954. An appeal to the Appellate Assistant Commissioner was also dismissed on August 10, 1955. Simultaneously with these proceedings, an appeal in so far as the quantum of income determined on best of judgment as liable to be taxed was taken to the Appellate Assistant Commissioner. He made an order on August 10, 1955, reducing the computed income by ₹ 5,000. Appeals were taken to the T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn had been filed even by January 12, 1954, when the assessment was made under section 23(4) of the Act. The return was filed on January 24, 1954, after such assessment had been made. The assessees explanation that the failure to submit the return was due to his illness was not accepted. His plea that his illness prevented him from handing over the books of account to the auditor to enable the latter to prepare the return was also rejected. The Income Tax Officer purported to rely upon the letters written by the auditor and the assessees reply to the penalty notice and finally stated : All these go to show that the assessee was not able to file a return before the time taken by him for the reasons best known to him. If the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice under section 22(2). The only question is about the quantum, ₹ 11,000. Far from mitigation, the conduct of the assessee has only aggravated the default. We see no reason to interfere. The question that stands referred to us canvasses the conclusion so reached by the Tribunal. It is undoubtedly proved that the assessee failed to furnish the return in response to the notice under section 22(2) of the Act. His failure to submit the return obviously confers jurisdiction upon the Income Tax Officer to make assessment to the best of his judgment. Having regard to the earlier proceedings that were before the Tribunal when it remitted the original quantum appeal as well as the application under section 27 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessment, to justify the imposition of the penalty, the absence of reasonable cause has to be established. Again, in an application under section 27 of the Act, it seems to us that the onus is upon the assessee to establish sufficient cause, while under section 28, before a penalty could be imposed, it is for the department to show that the assessee who failed to submit the return did so without reasonable cause. The extracts from the order of the Income Tax Officer and the Appellate Tribunal in so far as the imposition of the penalty is concerned clearly establish that both of these authorities relied only upon the failure by the assessee to show cause in the proceeding under section 27 in supporting their conclusions justifying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ars to have taken matters which are wholly extraneous to the consideration of the question under section 28. Whether the assessee maintained accounts regularly or not is wholly irrelevant, and the Income Tax Officers reference to some mala fide intention of the assessee seems to us to be entirely out of place. Nor are we able to appreciate the observation of the Tribunal that the conduct of the assessee had aggravated the default. How the subsequent conduct of the assessee can aggravate the offence which was principally one of failure to submit the return in compliance with section 22(2) we are unable to see. If by this observation the Tribunal meant that the assessees subsequent explanation for the default did not appear to be true and for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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