TMI Blog1985 (9) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... has been around Rs. 1, 34,000. This was the second year of the assessee's business and in the earlier year also the return was filed on August 23, 1974, instead of the due date of July 31, 1973 (30-6-73 ?). A penalty for this delay was levied under section 271(1)(a) of the Income-tax Act, 1961, but the same was quashed by the Income-tax Appellate Tribunal. For the present assessment year 1974-75, the Income-tax Officer again commenced penalty proceedings for the delay in filing the return under section 271(1)(a) and issued a show-cause notice to the assessee, requiring it to appear on a particular date before him. No appearance was made and as such a penalty of Rs. 18,360 was levied at the rate of 2% per month of tax for nine months' dela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the reported case law, it was for the Department to show absence of reasonable cause on the part of the assessee before any penalty was exigible under section 271(1)(a) of the Act. It was also accepted that the assessee could not finalise its accounts and arrive at correct figures of profit and loss unless confirmations were received from the Government Departments and the accounts too had been audited. The penalty imposed was, therefore, set aside. The Commissioner of Income-tax then moved a petition under section 256(1) of the Income-tax Act, 1961, for reference of a number of questions, said to be of law, to the High Court. The same, however, was rejected by the Tribunal, firstly, on the ground that what had been decided was a questio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the return ? 5. Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in holding that none of the lower authorities, in fact, considered the explanation of the assessee dated March 6, 1979, and none of them have recorded whether the grounds recorded in the explanation constitute reasons for the delay in filing the return although the Appellate Assistant Commissioner has specifically recorded the full facts in his order and came to the conclusion that the penalty was exigible in this case ? Is not the order of the Tribunal perverse as it has ignored a fact on record ? 6. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in cancelling the penalty as levied by the In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 271(1)(a) of the Act. (See in this regard CIT v. Gujarat Travancore Agency [1976] 103 ITR 149 (Ker) [FB] and Additional CIT v. Dargapandarinath Tuljayya Co. [1977] 107 ITR 850 (AP)[FB]). The Orissa High Court in another Full Bench decision in CIT v. Gangaram Chapolia [1976] 103 ITR 613 [FB], observed that taxing authorities must be satisfied that the failure to furnish the return in time was without reasonable cause and that the burden of proof of reasonable cause is on the assessee as the matter is within his special knowledge and this burden can be discharged by preponderance of probabilities as in a civil case and not necessarily by proof beyond reasonable doubt. The Madras High Court too in V. L. Dutt v. CIT [1976] 103 1TR 634, observ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er decision, the Tribunal's legal reasoning in arriving at the conclusion that there was no justification for the levy of penalty under section 271(1)(a) because the Revenue had not established the absence of reasonable cause, was held to be illegal and erroneous in law. It was held that the assessee had to satisfactorily explain the delay in filing the return and it was not for the Revenue to establish its failure. Ex facie, it was not obligatory for the firm to get its accounts audited, more so considering the income shown. In any case, it would appear that they could have availed of the services of a professional expert in this regard well in time to enable the filing of the return by due date. Moreover, the correct and complete mainte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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