9911796707
|
Home
Issues:
- Interpretation of penalty under section 271(1)(a) of the Income Tax Act, 1961. - Whether the Tribunal can entertain a pure question of law that was not dealt with by the Appellate Authority. Analysis: The case involved a reference made by the Tribunal under section 256(1) of the Income Tax Act, 1961, regarding the imposition of a penalty under section 271(1)(a). The assessee, a partner in a firm, filed the income tax return for the assessment year 1962-63 on April 20, 1965, instead of the due date in June 1962. The Income Tax Officer (ITO) initiated penalty proceedings under section 271(1)(a) as the return was filed late, despite a notice issued under section 139(2) of the Act. The ITO imposed a penalty of Rs. 14,996, which was 50% of the tax demanded. The assessee appealed against this penalty order, primarily challenging the imposition of the penalty despite filing the return within the time allowed under section 139(4) of the Act. The Appellate Assistant Commissioner (AAC) directed a reduction in the quantum of penalty, considering relief granted in the assessment. Subsequently, the assessee appealed to the Tribunal, arguing that no penalty should be imposed as the return was filed within the time allowed under section 139(4) and due to reasonable cause for the delay. However, the Tribunal, after considering the facts and legal grounds presented, upheld the penalty order, dismissing the appeal. The assessee then sought a reference to the High Court on two questions of law arising from the Tribunal's order. The Tribunal declined one question as vague but referred the other, which pertained to whether the return filed under section 139(4) should be treated as filed within the time allowed under section 139(1) or 139(2) to avoid penalty under section 271(1)(a). The High Court noted a prior decision that supported the revenue's position, based on the Supreme Court's ruling in a similar case. The High Court considered the arguments presented by the assessee's counsel, who contended that the Tribunal should have examined whether there was a reasonable cause for the delay in filing the return. The counsel also argued that the time allowed for filing the return should encompass both the statutory and ITO-allowed timeframes. However, the High Court, relying on previous decisions, including one from the Gujarat High Court and a Full Bench decision of the Orissa High Court, rejected these contentions. The Court held that the time limit under section 139(4) did not absolve the assessee from penalty under section 271(1)(a) if there was no reasonable cause for the delay in filing the return within the statutory timeframes of section 139(1) or 139(2). In conclusion, the High Court answered the referred question in favor of the revenue, affirming the Tribunal's decision to uphold the penalty under section 271(1)(a). The Court emphasized that the assessee's failure to challenge specific findings during the appeal process limited the grounds for contesting the penalty imposition. The judgment highlighted the significance of timely filing returns and the consequences of delays under the Income Tax Act, 1961. *K. LAHIRI J. agreed with the judgment.*
|
