TMI Blog1983 (4) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... re as follows : The case relates to the assessment year 1966-67. The filing of the return by the assessee was due by September 30, 1966. Notice under s. 139(2) of the I.T. Act, 1961 (hereinafter to be referred to as " the Act "), was sent by registered post on April 28, 1966. According to the stand of the Revenue, the notice is supposed to have been served by May 4, 1966. The assessee filed its first return on November 8, 1966, which was signed by its accountant, Shri K.T. Doshi. On being pointed out this defect in the course of the assessment proceeding, another return under the signature of a partner of the firm was filed on August 6, 1968. As no valid return was filed till this date (August 6, 1968), the ITO initiated penalty proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vying the minimum penalty but we restrict the period to one month only. The penalty should be levied according to law, after taking into account the income finally determined in quantum to this extent only the order of the Appellate Assistant Commissioner in that year is reversed." Thus, in the opinion of the Tribunal, the default was of one month only and the Tribunal accordingly confirmed the order of the ITO for the levy of penalty to the extent of one month only. A copy of the order of the Tribunal has been marked annex. C to the statement of case. Learned senior standing counsel for the Department has firstly submitted that the return filed by the assessee on November 8, 1966, signed by the accountant (Shri K. T.Doshi) of the firm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice of another instance from the record that the return on behalf of the appellant-firm, on another occasion, was filed by an accountant, Shri P. N. Lal, and the assessing officer even on that occasion did not raise any objection against the return so filed and completed the assessment on the basis of that return which was not signed by any partner. In my opinion, on the facts available on the record before the Department, it was clear that the assessee was induced to believe that the return filed by the assessee signed by the accountant on behalf of the firm was a valid return and, as such, the assessee was under a genuine and bona fide belief that the return so filed, signed by the accountant, was a valid one, as was accepted in the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as below : " It was stated by the departmental representative that the Appellate Assistant Commissioner was not correct in deleting the penalty......... According to him, there was no explanation of the assessee for filing the original return in the assessment year 1966-67 which admittedly was delayed by one month and eleven days even if we ignore the filing of the second return duly signed by the partners of the firm. It was stated that in any case for this year the penalty for the period of full one month should have been confirmed by the Appellate Assistant Commissioner." From this, it is obvious that the return filed by the assessee was treated by the Department as one under s. 139(1) of the Act and, hence, the Department took the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... findings as above, the assessee has shown reasonable cause and it cannot be said that it is not a reasonable cause, because it is not a sufficient cause. Learned senior standing counsel for the Department, in support of his submission, has relied upon the case of Commr. of Agrl. I.T. v. Sri Keshab Chandra Mandal [1950] 18 ITR 569 (SC). But, in my opinion, on the facts and in the circumstances of the instant case, the case relied upon is not attracted on the statement of fact submitted by the Department, nor does it arise out of the order of the Tribunal. Thus, in my opinion, the first submission advanced on behalf of the Department fails. This takes me to the second submission advanced by the learned senior standing counsel for the Depar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ving been filed on November 8, 1966, the Department, in my opinion, took a very correct stand that there was a default for at least about one month. This consistent stand of the Department before the AAC and the Tribunal was accepted by the Tribunal, and the Tribunal, in my opinion, rightly reversed the order of the AAC in part and very rightly restricted the period of default to one month only. Thus, I hold that, on the facts and in the circumstances of the case, the Tribunal was justified in law in restricting the period of default under s. 271(1)(a) of the Act to one month only for the assessment year 1966-67. In the result, the question referred to this court for opinion is answered in the affirmative, in favour of the assessee and ag ..... X X X X Extracts X X X X X X X X Extracts X X X X
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