TMI Blog1993 (10) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... nd therefore, the penalty sustained should be cancelled. 2. Assessee is an individual, who carries on brokerage business in motor car. No books of account have been maintained by the assessee for the business. For the assessment year 1982-83 for which the accounting year ended on 31-3-1982, the assessee filed return of income on 3-4-1984 showing a business income of Rs. 14,500 on an estimate basis. The ITO, inter alia, noticed that the drawings of the assessee and his father, who is separately assessed to tax, amounted to Rs. 14,400 but they were not sufficient, for a family of 10 members. Considering this aspect, the ITO determined the business income at Rs. 30,000 roundly on estimate basis, by his order dated 28-1-1985. 3. Pursuant to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the assessee, decisions in the case of Sunderlal Rethi v. ITO [1974] 97 ITR 183 (Cal.) and Essorde Industrial v. CIT [1977] 110 ITR 298 (Mad.) were relied upon, in support of the case of the assessee. In the case of Sunderlal Rethi, return was filed belatedly but before the assessment was made. It is for this reason the Calcutta High Court held that the acceptance of the return by the ITO filed out of time without applying for extension of time will not debar the ITO from imposing penalty upon the assessee for not filing the return within time. It also pointed out that section 139(4) of the IT Act, 1961, only permits the assessee to file return beyond the time allowed under section 139(1) or 139(2) of the Act before the assessment is ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ret the statute as it stands and in case of doubt, in a manner favourable to the taxpayer, and also to the effect that if the court finds that the language of a taxing provision is ambiguous or capable of more meaning than one, then the court has to adopt that interpretation which favours the assessee, more particularly so where the provision relates to the imposition of penalty. The learned Departmental Representative, on the other hand, supported the orders of the authorities. 8. We have duly considered the rival submissions and the paper compilation filed by the assessee and the records. It is seen that the appeal filed by the assessee is barred by time by 14 days. When the assessee was called upon to explain as to why the appeal could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... means the total amount of income referred to in section 5, computed in the manner laid down in this Act. Therefore, total income is one which is computed in accordance with section 5 and in the manner laid down in the Income-tax Act. It is only when such determined income does not exceed the maximum amount not chargeable to tax in the case of an individual by Rs. 1,500 exemption or immunity is given from the levy of penalty under section 271(1)(a). In other words, if the non-taxable limit of income in the case of an individual for the assessment year 1982-83 is Rs. 15,000 as claimed by the assessee, income determined up to Rs. 16,500 would not attract levy of penalty under section 271(3)(a). In case the total income determined exceeds the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailure to submit a return in accordance with section 139(1) and has no application to a case of filing a delayed return. The High Court also held the penalty levied in the instant case have upheld furnishing the return of income by a firm which was treated as registered firm under section 183(b) was held to be valid. Thus, the ratio of the Madras High Court is that the exemption contemplated under section 271(3)(a) comes into force or application only in a case where there is failure to submit a return in accordance with section 139(1) and no application to a case of delayed return. In other words, any return filed under section 139(4) would attract levy of penalty under section 271(1)(a) because it is not a case of failure to furnish the r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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