TMI Blog1983 (12) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... he years in question were Rs. 26,116 and Rs. 24,764, respectively ? " It is not in dispute that in respect of the assessment years 1962-63 and 1963-64, the assessee should have filed the returns of its income on or before August 31, 1962 and June 30, 1963, respectively, in accordance with the provisions of s. 139(1) of the I.T. Act. It is also not in dispute that the assessee-firm failed to file the returns for the aforesaid two years before the expiry of the time allowed by law and that the returns for both the years 1962-63 and 1963-64 were filed on February 13, 1964. Thus, there was a delay of 17 months in the filing of the return pertaining to the year 1962-63, while there was a delay of seven months in the filing of the return rela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of penalty. On further appeal, the Income-tax Appellate Tribunal, Delhi Bench" B " (hereinafter called " the Tribunal "), accepted the aforesaid contention raised by the assessee-respondent and held that no penalty could be levied under s. 271(1)(a) for either of the two years and the orders imposing penalty were cancelled for both the aforesaid years by the Tribunal by its consolidated order dated May 23, 1970. The Tribunal, while upholding the contention advanced on behalf of the assessee, observed as under: " We are inclined to uphold the objections raised by the learned counsel for the assessee. The income, according to the assessee's own calculations, fell below the level which made it liable to penalty under s. 271 (1)(a). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce with the books of account maintained by the assessee-firm would not be accepted by the ITO. The Tribunal also held that there was no suggestion of mala fides or manipulations in the account books of the assessee for any of the two years. It is a different thing that the ITO did not accept the income as shown by the assessee in its returns, but made certain additions in both the years so that the total income of the assessee in each of the two years was found to be taxable. However, the Tribunal accepted the explanation offered by the assessee for late filing of returns by the assessee and observed that the assessee could reasonably take the view that it was not liable to submit the returns in the light of the income calculated on the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent material or evidence from which it could be inferred that the assessee has consciously concealed the particulars of its income or has deliberately furnished inaccurate particulars in respect of the same. The Madhya Pradesh High Court in CIT v. Modi and So) s [1976] 102 ITR 548 (MP), observed that the phrase "failure to file a return without reasonable cause" occurring in s. 271 (1)(a) of the I.T. Act, 1961, vests some kind of discretion in the authority imposing the penalty to find out whether there was a reasonable cause or not and if in the opinion of authority there was reasonable cause, then in that case no penalty could be imposed. It was also observed by their Lordships in the aforesaid case that the question of existence or oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 271(1)(c) of the I.T. Act, and it was observed that whether there was fraud or gross or wilful neglect in the filing of a proper return of its income on the part of an assessee is essentially a question of fact. We have considered the material on record and it does not appear to us that the assessee-firm has either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest or that it acted in conscious disregard of its obligations under the law. There is no case of gross or wilful neglect on the part of the assessee-firm. The Tribunal held that there was no suggestion of mala fides or manipulation in the account books of the assessee and that on the basis of the books of account kept by the assessee-firm, it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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