1992 (9) TMI 80 - HC - Income Tax

Summary

Issues Involved:
1. Justification of penalty under section 271(1)(a) of the Income-tax Act, 1961.
2. Evidence on record to discharge the initial burden on the Department.
3. Reasonableness of delay in filing returns due to non-availability of share of profit from two firms.
4. Justification of the Tribunal's decision regarding the non-finalization of accounts and knowledge of share income before the due date.

Detailed Analysis:

1. Justification of Penalty under Section 271(1)(a) of the Income-tax Act, 1961:
The Tribunal upheld the penalty imposed by the Income-tax Officer for the assessment years 1967-68 and 1968-69 due to the assessee's failure to file returns within the prescribed time. The Tribunal noted that the assessee did not apply for an extension of time and had previously filed returns late for other years, resulting in penalties. The Tribunal concluded that the assessee failed to establish a reasonable cause for the delay in filing returns, despite the explanation that the share income from two firms was not available.

2. Evidence on Record to Discharge the Initial Burden on the Department:
The Tribunal found no evidence indicating that the books of account of the firms were not ready or that the assessee's share income was not worked out in time. The Supreme Court decision in Addl. CIT v. I M. Patel and Co. clarified that the burden of showing reasonable cause for delay lies with the assessee, not the Department. Thus, the question of the Department's initial burden was considered redundant.

3. Reasonableness of Delay in Filing Returns Due to Non-Availability of Share of Profit from Two Firms:
The Tribunal and the Appellate Assistant Commissioner both determined that the non-availability of share income from the firms was not a sufficient cause for the delay. The Tribunal emphasized that the mere fact that the firms filed their returns late did not justify the delay in the assessee's returns. The court agreed with this view, noting that the explanation provided by the assessee was insufficient and lacked supporting evidence.

4. Justification of the Tribunal's Decision Regarding Non-Finalization of Accounts and Knowledge of Share Income Before the Due Date:
The Tribunal's decision was based on the lack of evidence that the firms' accounts were not finalized or that the assessee was unaware of his share income before the due date. The court supported the Tribunal's view, stating that the circumstance of not receiving share income alone does not constitute a sufficient cause for delay. The court referenced previous decisions, including the Delhi High Court's ruling in Madan Lamba v. CIT, which held that such circumstances are relevant but not conclusive.

Conclusion:
Questions Nos. 1, 3, and 4 were answered in the affirmative, against the assessee and in favor of the Revenue. Question No. 2 was addressed by stating that there is no initial burden on the Department to discharge, as per the Supreme Court decision in Addl. CIT v. I M. Patel and Co. The judgment emphasized the assessee's responsibility to demonstrate reasonable cause for any delay in filing returns.