9911796707
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Issues:
1. Whether the Tribunal erred in holding that the assessee was prevented by reasonable cause from filing the return of income within the time allowed by the notice under section 139(2) of the Income-tax Act, 1961? 2. Whether the Tribunal misdirected itself in law in canceling the order of penalty made by the Income-tax Officer under section 271(1)(a) of the Income-tax Act, 1961? Analysis: The case involved a reference under section 256(2) of the Income-tax Act, 1961, for the assessment year 1963-64. The primary issue was the delay of 43 months in filing the return of income by the assessee. The Income-tax Officer imposed a penalty under section 271(1)(a) of the Act, which was upheld by the Appellate Assistant Commissioner but later set aside by the Tribunal. The Tribunal believed there was no conscious disregard by the assessee of legal obligations and that the disputes among partners were genuine, leading to the delay. However, the High Court disagreed, citing the Supreme Court's ruling that mens rea was not necessary to prove in penalty proceedings under section 271(1)(a). The High Court noted that the Tribunal erred in requiring the Department to prove conscious disregard by the assessee or dishonest conduct for imposing the penalty. It emphasized that the onus is on the assessee to demonstrate a reasonable cause for the delay in filing the return. The Tribunal's acceptance of the assessee's submission without concrete evidence was deemed insufficient. The High Court highlighted that disputes among partners or the seizure of books by the Income-tax Department did not justify the significant delay in filing. It concluded that there was no valid reason for the delay and that the Tribunal's decision to cancel the penalty was unjustified. In conclusion, the High Court answered both questions in the reference in favor of the Revenue, emphasizing that the Tribunal's decision lacked proper consideration of whether a reasonable cause existed for the delay in filing the return. The judges unanimously agreed on the decision, with no order as to costs being issued.
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