TMI Blog1974 (5) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... enalty levied under section 271(1)(a) of the Act ? " The facts of this case are that the respondent-firm, Messrs R.B. Jodhamal Bishan Lal Kuthiala, Hoshiarpur, is a registered firm. Notice under section 22(2) of the Indian Income-tax Act, 1922, was served on the assessee on November 4, 1959, to file the return of income on or before December 8, 1959. The assessee filed its return of income for the assessment year 1959-60, on August 5, 1961, and thus there was a delay of 19 months in filing the return of income. The assessment was made on a total income of Rs. 12,03,324, which was reduced to Rs. 11,72,762 as a result of the appellate orders. As the assessee had failed to file its return within time, the Income-tax Officer after giving due ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on under section 256(2) of the Act. Section 271(1)(a)(i) of the Act reads as follows : " (1) If the Income-tax Officer or the Appellate Assistant Commissioner, in the course of any proceedings under this Act, is satisfied that any person--- (a) has without reasonable cause failed to furnish the return of total income which he was required to furnish under sub-section (1) of section 139 or by notice given under sub-section (2) of section 139 or section 148 or has without reasonable cause failed to furnish it within the time allowed and in the manner required by sub-section (1) of section 139 or by such notice, as the case may be, or ...... he may direct that such person shall pay by way of penalty,---- (i) in the cases refered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return, in the case of Messrs. Roshan Lal Kuthiala, Pathankot (within the jurisdiction of the Income-tax Officer, A-Ward, Gurdaspur), was finalised and submitted. During the month of July, 1961, there were three hearings before the Appellate Tribunal, in respect of this very group, two hearings before the Deputy Director of Inspection and the Director of Inspection, one before the Appellate Assistant Commissioner of Income-tax and then the session started at Ambala from the 18th of that month before your learned predecessor-in-office for 1958-59 assessment of this very firm and this lasted till the 18th of that month and on the 21st of that month both myself and your learned predecessor-in-office had to appear before the Appellate Assist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stituted a reasonable cause for the balance period of three months. We, therefore, hold that the assessee was not without a reasonable cause for the months of May, June and July. As we have held that the assessee was not without a reasonable cause within the meaning of section 271(1)(a), the legal contentions raised by the assessee and reproduced above become academic. But we have kept them as the assessee wanted the same to be kept alive. In the result, penalty is deleted and the appeal allowed." Section 256(2) of the Act lays down that if the Appellate Tribunal refuses to state the case on the application made under sub-section (1) of that section on the ground that no question of law arises, the assessee or the Commissioner, as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of fact. Whether there is a reasonable cause or not is a question of fact, for its determination depends on facts. In Sree Meenakshi Mills Ltd. v. Commissioner of Income-tax, it was held : " It has consistently been held that inferences from facts may themselves be inferences of fact and not of law, and that such inferences are not open to review by the court. " It was further observed in this case that when the finding is one of fact, the fact that it is itself an inference from other basic facts will not alter its character as one of fact. In Manindra Land and Building Corporation Ltd. v. Bhutnath Banerjee it was observed : " The High Court fell in error in interfering with the finding of fact arrived at by the subordinate ju ..... X X X X Extracts X X X X X X X X Extracts X X X X
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