TMI Blog1975 (2) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... r imposing penalty for late filing of the return. By order dated December 1, 1966 (petitioner's annexure "C"), the Income-tax Officer was of the opinion that there was no reasonable cause for the late filing of the return and, therefore, he imposed a penalty of Rs. 10,448. On an appeal to the Appellate Assistant Commissioner, he, by order dated February 20, 1969 (petitioner's annexure "E"), reduced the penalty to Rs. 3,000. On a further appeal to the Income-tax Appellate Tribunal, the Tribunal by order dated September 2, 1971 (petitioner's annexure "G"), set aside the entire penalty on the ground that in the transition period before the Income-tax Act, 1961, came into force from April 1, 1962, the departmental practice was not to impose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The question will be whether as required by section 271(1)(a) of the Income-tax Act, 1961, there was reasonable cause or that the assessee failed to furnish the return without a reasonable cause. For determining the reasonable cause, it was open to the Income-tax Appellate Tribunal to take notice of a departmental practice which might not have been strictly in accordance with the provisions of the Indian Income-tax Act, 1922. As such, we do not think that question No. 2 posed in this application for reference is a question of law which we should be called upon to answer by requiring the Appellate Tribunal to refer it to us. As regards the question No. 1, the requirement of section 271(1)(a) is that penalty is imposable where an assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute. Those in charge of the affairs of the company in failing to register the company as a dealer acted in the honest and genuine belief that the company was not a dealer. Granting that they erred, no case for imposing penalty was made out." There can be no doubt that if penalty is impossible, then it has to be under the Income-tax Act, 1961, as per the requirements of se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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