1982 (7) TMI 97 - AT - Income Tax

Summary

Issues:
- Whether the penalty under section 271(1)(a) imposed on the assessee was justified.

Analysis:
1. The appeal was against the order of the CIT(A) confirming a penalty of Rs. 61,900 under section 271(1)(a) imposed by the ITO for allegedly late filing of the income tax return.

2. The assessee claimed to have filed the return on 24th Aug., 1972, while the ITO contended that it was filed on 2nd Sept., 1974. The CIT(A) upheld the penalty as the assessee did not press the claim of filing on 24th Aug., 1972.

3. The assessee argued that the return filed on 2nd Sept., 1974, was a duplicate one, and the original return was submitted on 24th Aug., 1972. The assessee presented an acknowledgment receipt as proof of filing on 24th Aug., 1972.

4. The Department claimed that the acknowledgment receipt was a duplicate and not original. The Department argued that the assessee's name was not in the inward register, indicating non-filing on 24th Aug., 1972.

5. The Tribunal noted that the assessee's conduct did not show a guilty mind or willful disregard of obligations. The Tribunal emphasized that the burden of proof for penalty lies on the Department, which failed to establish mens rea or intentional non-compliance by the assessee.

6. The Tribunal found that the assessee, being a first-time defaulter, acted in good faith by submitting Form No. 6 for an extension and producing the receipt. The Tribunal concluded that there was no basis for penalty imposition and canceled the penalty imposed by the ITO and upheld by the CIT(A).

7. The Tribunal held that the benefit of doubt in penalty proceedings goes to the assessee, especially in quasi-criminal matters. The decision was in favor of the assessee, allowing the appeal and canceling the penalty.