TMI Blog1993 (8) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on 31-1-1982 and 31-1-1983. The returns were due on 30-6-1982 and 30-6-1983. On 20-7-1982, there was a search in the assessee's business premises and the books of account were seized. On 11-7-1984, the ITO issued notices under section 148 of the Act calling upon the assessee to file returns of income for the two years. In response thereto, the assessee filed the returns for both the years on 25-3-1985. On completion of the assessments, the ITO initiated proceedings for imposing penalties for the delayed submission of the returns. The assessee offered its explanation in writing. It was explained on behalf of the assessee that because of the seizure of the books of account the assessee could not file the returns of income in time. In this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roper to consider the entire period of delay up to March 1985 as having been caused only by the seizure. In this view of the matter he scaled down the period of default to 10 months in each year as being attributable to the assessee. The penalties were, therefore, reduced to Rs. 11,902 and Rs. 9,848. 5. The department is not in appeal before us. The appeals are at the instance of the assessee. The learned representative for the assessee repeated the contentions raised before the deptl. authorities and submitted that on the facts of the case and having regard to the assessee's explanation, the CIT(A) should have cancelled the penalties instead of sustaining the penalties for the period from May 1984 up to March 1985. He filed an affidavit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Co. [1989] 179 ITR 419 (Punj. Har.). It was also submitted by the Ld. representative for the assessee that the delay in filing the returns was not wilful or intentional, but, due to the circumstances beyond the control of the assessee for which no penalty can be justifiably imposed. 7. The Ld. D. R. supported the order of the CIT (A). 8. On a careful consideration of the rival contentions, we are of the view that the penalties sustained by the CIT (A) have to be cancelled. It is not disputed that the books of account that were seized on 20-7-1982 related to the accounting years ended 31-3-1981, 31-1-1982 and for the period 1-2-1982 up to 20-7-1982. When the books of account are seized, naturally the assessee is handicapped in filing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to the department seeking permission for taking copies. The assessee filed the petition only on 16-3-1985. But, we have before us the affidavit of the partner of the assessee-firm that even before a formal petition was filed the assessee has been repeatedly making oral requests to the ITO seeking permission to take copies of the seized books. We have no reason to disbelieve the averment made in the affidavit. The assessee has been pointed out even during the penalty proceedings that its authorised representative, and Mr. Sood the partner of the assessee-firm, have been making requests to the ITO even before 16-3-1985 to allow them to take out copies from the seized books. We find from the penalty orders that this specific plea has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y or detract from the reasonableness of the cause for the delay in filing the returns, namely, the seizure of books. It is to be noted that as soon as the permission was granted on the assessee's petition dated 16-3-1985 the assessee had gone about the matter in great despatch and has ultimately filed returns for both the years within a week i.e., on 25-3-1985. We are, therefore, satisfied that the seizure of the books of account constituted sufficient or reasonable cause for the delay in filing the return for both the years. The CIT(A) having accepted in principle that the seizure of the books would constitute reasonable cause, was not justified in sustaining the penalties for the period from May 1984 to March 1985. For the same reason he ..... X X X X Extracts X X X X X X X X Extracts X X X X
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