TMI Blog1981 (11) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... or a period of 43 months. The assessee preferred an appeal to the AAC and gave certain explanations for the delay in the filing of the return. The AAC accepted the case of the assessee that there was reasonable cause for the delay in the filing of the return but only up to 31st December, 1968. He, therefore, directed the ITO to recompute the penalty on the basis of the default without reasonable cause being for the period commencing on I St January, 1969, and ending with the date on which the return was filed. It may also be mentioned that by this time there had been a reduction in the total income as a result of an appeal and the AAC also directed the amount of penalty to be calculated on the basis of the reduced total income. Not sati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of opinion that the view taken by the Tribunal cannot be upheld. Section 271(1)(a) authorises the ITO to impose a penalty where he is satisfied that the assessee has, without reasonable cause, failed to furnish the return of total income within the time allowed and in the manner required by s. 139. Sub-clause (i) of the second paragraph of the above section , as it stood at the relevant as follows: " In the cases referred to in clause (a), in addition to the amount, of the tax, if any, payable by him, a sum equal to two per cent. of the tax for every month during which the default continued, but not exceeding in the aggregate fifty per cent. of the tax." This is the clause which deals with the amount of penalty imposable on the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during which the default continued " indicate only the multiplier to be adopted in determining the quantum of penalty. It cannot be inferred from the reference to 50% made in the sub-paragraph that the section intends to ignore all delay beyond the period of 25 months. We are, therefore, unable to agree with the view taken by the Tribunal and in our opinion the correct decision in this case is that the assessee would be liable for penalty in respect of the default between January 1, 1969, and February 9, 1970. The Tribunal has tried to draw support for its conclusion from decision of the Supreme Court in J. P. Jani, ITO v. Induprasad Devshanker Bhatt [1969] 72 ITR 595. In that case the question before the supreme Court was whether the ITO ..... X X X X Extracts X X X X X X X X Extracts X X X X
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