TMI Blog1983 (4) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... 1961, the return of income was due on or before 30th June, 1976. The assessee applied for time till 30th September, 1976 on the ground that the accounts were not yet audited. The ITO allowed time till 31st August, 1977. The assessee again applied on 26th February, 1976 for time till 30th November, 1976 on the same ground. The ITO did not communicate to the assessee the order, if any, passed by him on that application. The audit was completed on 23rd September, 1977. The return was filed on 8th February, 1978. The ITO made the assessment u/s 143 (3) of the Act on 25th July, 1979 and started penalty proceedings u/s 271(1)(a) of the Act. It seems that similar penalty proceedings u/s 271(1)(a) of the Act were started for the earlier asst. yr. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be 17 months, that is, from 1st September, 1976 to 6th February, 1978. Thus he imposed a penalty of Rs. 2,99,210 u/s 271 (1) (a) of the Act. 4. The assessee appealed to the CIT (A) and contended that the penalty imposed was not justified. IT was pointed out that a dispute between the management and the staff of the assessee was going on before the Industrial Tribunal. The dispute was first registered on 28th February, 1972 and the Award was made on 9th February, 1976 and the final Notification thereof was given on 9th March, 1976. As a result of this dispute, normal work was disrupted and the staff did not cooperate in closing the accounts and getting them audited expeditiously. Further, two of the executive directors died, one on 31 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee being within the financial year, should be deducted (but not the later two payments made beyond the financial year) while calculating the "assessed tax" under the Explanation to s. 271(1) (a). He, thus, gave partial relief and directed that the amount of penalty be reduced accordingly. 6. The assessee has come up in appeal before us on the ground that the CIT (A) should have cancelled the penalty in toto while the department has come up in appeal before us objecting to the reduction in the quantum of penalty given by the CIT(A). 7. Shri. D.M. Harish, the ld. Representative for the assessee, took us through the orders of the ITO and the CIT (A) and the other relevant facts on record/ He explained that the assessee's clients ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied for deduction while computing the "assessed tax" under the Explanation to s. 271(1)(a) of the Act. 9. We have considered the contentions of both the parties as well as the facts on record. Sec. 271(1)(A) of the Act prescribed a penalty for not filing the return within the prescribed time without reasonable cause. From the facts set out n detail above, we have no hesitation in coming to the conclusion that they were indeed extraordinary and the assessee has fully explained the delay upto the date of completion of audit, namely, 23rd September, 1977. We agree with Shri. D.M. Harish that no penalty u/s 271(1) (a) lies for the mere failure to apply for time or to comply with the notice u/s 142(1) of the Act. No penalty has been prescribe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al, we do not see any merit in the departmental appeal relating to the penalty u/s 271 (1) (a). Hence, we reject the same. 11. We now come to the third appeal which is filed by the department against the order dt. 30th April, 1981 of the CIT(A) by which he cancelled the penalty of Rs. 63,355 imposed by the ITO u/s 273 (a) of the Act for the asst. yr. 1976-77. 12. The assessee was demanded an advance-tax of Rs. 10,59,465. The assessee filed an estimate on 10th December 1975 showing such liability at Rs. 7 lakhs and paid the advance-tax accordingly. Subsequently, the demand raised on regular assessment amounted to Rs. 9,01,285. The ITO started penalty proceedings u/s 273 (a) of the Act on the footing that the estimate made at Rs.7 lakhs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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