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TMI Blog1975 (9) TMI 156X X X X Extracts X X X X X X X X Extracts X X X X ..... om high blood pressure, heard trouble on account of sheumatice heart and was having many other medical complications due to several illnesses and so he could not attend to his business nor to the maintenance of the books of accounts and that when the accounts were later completed his total income for each one of the three years in question was much below the taxable limit and he did not file the return. Under s. 139(1) of the Act the returns are obligatory only if the income exceeded taxable limit. However, notice was issued to the assessee under s. 148 of the Act and served on him on 24th Dec., 1971 in respect of all the three years. Since no return of income was filed the ITO completed the assessment for the three years under s. 144 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AAC. 4. The learned counsel for the assessees urged that the assessees was a chronic rheumatic heart patient and for a number of years he could not attend to his business and when the books were completed his income was below the table limit and he did not think it proper to file the returns as he was not statutorily bound to file such return in that case under s. 139(1) of the Act. He further pointed out that on receipt of the notice under s. 148 of the Act the assessee had sent a reply on 22nd Jan., 1972 stating that because of his sickness he was not in a position to attend to the activities of daily routine and if his health improved he would attend the hearing personally but as he was still unwell he could not comply with that notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder s 148 of the Act. The ITO had passed exparte only of assessment of income estimating it and in the revisions to CIT the estimates were reduced. 6. On these facts the only question is whether there was reasonable cause for the assessee is not filing the returns before the exparte assessment was made. As already pointed out till the receipt of the s. 148 notice in the end of Dec., 1971 the assessee was under the bonafide impression that, as his incomes as per accounts were below the taxable limit in each one of the three years he did not think it proper to file the returns. So that was a justifiable cause for not filing the returns till December, 1971. 7. In reply to the notice under s. 148 of the Act the assessee had set a reply on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned the cause for not filing the return due to severe illness. The ITO, as there was no compliance of the notice had straight away passed exparte assessments on 13th March, 1972. So if at all there was any delay in the filing of the returns that was only for about two to three months. Even that has been properly explained by the assessee as due to his severe illness. The penalty proceedings being quasi criminal the mere failure to file the returns in time is not sufficient to levy penalty. Following the trend of the decision of the various High Court we agree with the finding of the AAC that the assessee had not disregarded his legal obligations nor was he guilty of any contumacious conduct. Under such circumstances the cancellation of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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