TMI Blog1982 (3) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... he said firm the assessee became a partner in the firm of M/s Asian Textiles Co. His share was 50 per cent in the said firm. The ITO after the completion of the original assessment under s. 143(3) of the Act in respect of asst. yrs. 1965-66 and 1966-67 came to know that the assessee failed to disclose his share income from the said firm in both the years under consideration. Thus, the ITO had reason to believe that, by reason of the omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for those years, the income chargeable to tax has escaped assessment for both the assessment years under consideration. He, accordingly, initiated proceedings under s. 147(a) r/w s. 148 of the IT Act, 1961. In respect of asst. yrs. 1965-66 and 1966-67, notices under s. 148 of the Act were served on 12th Dec., 1973. The returns were to be filed for both the years within 30 days of the service of the notice, i.e. by 11th Jan., 1974. The returns were actually filed on 20th Feb., 1978. In the asst. yr. 1965-66, the income was disclosed at Rs. 46,361 and income for the asst. yr. 1966-67 was disclosed at Rs. 33,670. The ITO after conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause or the default." Consequently, the ITO imposed a penalty of Rs. 25,000 and Rs. 26,000 under s. 271(1)(a) of the IT Act, 1961 in respect of asst. yr. 1965-66 1966-67 respectively. 3A. Being aggrieved with the order of the ITO the assessee took up the matter in appeal. Before the ld. AAC the contention of the appellant was that he was not given reasons for initiation of proceedings under s. 148/147(a) in spite of repeated requests and as such there was no deliberate default on the part of the assessee in not filing the return within time. In the alternative it was contended that the default may be taken from 11th Jan., 1974. The ld. AAC after considering the contention of the assessee and the material on record came to the conclusion that there were no reasonable causes which prevented the assessee from filing returns with in time. According to him the delay in filing the returns was deliberate. So the ld. AAC agreed with the finding of the ITO that in both the years under consideration penalty under s. 271(1)(a) of the Act was clearly leviable. The ld. AAC, however, reduced the quantum of penalty at Rs. 10,228 Rs. 12,833 in respect of asst. yr. 1965-66 and 1966-67 res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to file the returns with in the time. The Department also proved that the conduct of the assessee has been contumacious and dishonest. Ultimately the assessments were completed under s. 144 of the Act. The Tribunal vide its order dt. 20th June, 1980 upheld the order of the ITO that the assessee was having share income in both the years under consideration from the firm of M/s Asian Textiles and the same was not disclosed by the assessee in the original returns. According to the ld. Deptl. Rep. the decision relied upon by the assessee is not applicable on the facts of the present case. Thus, it was contended that the ld. AAC rightly sustained the order of penalty. 6. We have heard the parties and perused the entire evidence on record. Before discussing the contentions of the parties in detail, we would like to point out that under s. 271(1)(a) of the Act failure "without reasonable cause" to furnish the return is an ingredient of the offence. Sec. 271(1)(a) provides for penalty in cases where the assessee has either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of his obligation. The legal burden is on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ITO was not under obligation under any provisions of the IT Act to supply the copy of the reasons recorded by him under s. 147(a) /148 to the assessee. Apart from it the ITO vide letter dt. 5th Aug.,1974 informed the assessee as under: "Assessments for the asst. yrs. 1965-66 to 1969-70 are reopened under s. 148. In response to notice under s. 148 you have not filed returns of income for the above years. Several notices under s. 142(1) have been issued, however, you have not either filed returns of income or produced books of accounts for the relevant years, on the ground that you do not know why the action is taken. It is also requested by you that the reasons for opening the assessments may be intimated to you. In this connections, I have to inform you that in view of the provisions of s. 148, reasons for reopening the assessment can only be furnished after filing the returns of income. Under the above circumstances, I have to request you to file returns of income for asst. yr. 1965-66 to 1969-70 and no your filing the above returns, the reasons for reopening the assessments will be furnished which please note. You are, therefore, requested to file the returns of income fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee failed to disclose such income in the original returns for both the years under consideration. The assessee was having knowledge from the very beginning that he was one of the partners in the firm of M/s Asian Textiles Co. And there was share income from the firm in both the years under consideration. Under these circumstances, the assessee was under obligation to disclose the income in the original returns pertaining to asst. yrs. 1965-66 and 1966-67. 11. In the present case notices under s. 143(2) were given to the assessee on 16th Jan., 1974, 2nd Feb., 1974, 21st Feb., 1974, 29th Feb., 1974, 13th Dec., 1977and 9th Feb., 1978 requiring the assessee to comply with the said notices on 21st Jan., 1974, 8th Feb., 1974, 4th March, 1974 12th July 1974, 19th Dec., 1977 and 20th Feb., 1978 respectively. The notice under s. 148 was served on 12th Dec., 1973. So the assessee was under obligation to file the return for both the years on or before 11th Dec., 1974. After the due date of filing the returns, the ITO issued notices under s. 142(1) of the Act on the aforesaid dates. In spite of service of such notices the assessee neither furnished the returns nor produced the boo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad failed to file the return within the extended time or the Department should be in a position to show that the assessee concerned was habitually filing the returns beyond the time specified in very assessment year or on every possible occasion or the Department may be able to show that the assessee was aware of the need to file the return within the time specified and yet had failed to do so. 14. In the present case, the authorities below have pointed out the facts and circumstances that the assessee in conscious disregard of his obligation failed to file the returns within time. The ITO issued many notices under s. 142(1) of the Act. In spite of service of much notices accounts were not produced. Notice under s. 148 was served. Even then the returns were not filed within the time. The letter dt. 5th Aug., 1974 referred to above was served on the assessee making it clear that the ITO is not obliged to disclose the reasons for reopening of the assessments. Even after service of such notices for pretty long period the returns were not filed by the assessee. So in the present case the Department not only discharged the initial onus which lay upon it but also showed that the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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