1982 (3) TMI 88 - AT - Income Tax

Summary

Issues:
1. Whether the Appellate Assistant Commissioner (AAC) erred in confirming the penalty order imposed by the Income Tax Officer (ITO) on the assessee for delay in filing the return of income.

Analysis:
1. The appeal before the Appellate Tribunal ITAT Ahmedabad-B revolved around the imposition of a penalty on the assessee for failing to file the return of income on time. The primary issue was whether the AAC erred in upholding the penalty order imposed by the ITO despite the explanation provided by the assessee for the delay in filing the return.

2. The assessee contended that the delay in filing the return was due to the heavy tax payable under section 140A, as the firm had no cash balance to make the payment on time. The ITO did not find the explanation satisfactory, stating that the assessee failed to provide evidence in support of the claim and did not apply for an extension of time. The ITO imposed a penalty of Rs. 2065 under section 271(1)(a), which was confirmed by the AAC.

3. The Tribunal considered the arguments presented by both parties. The assessee claimed that the return was ready before the due date but could not be filed due to the lack of funds to pay the tax under section 140A. However, the Departmental Representative contended that the assessee could have filed the return without payment of tax and that the failure to pay tax was a deliberate default on the part of the assessee.

4. The Tribunal analyzed section 140A, which requires the assessee to pay tax before filing the return but allows for the return to be filed even without payment, with the penalty imposed for non-payment. The Tribunal noted the turnover of the assessee in previous years, indicating the ability to pay the tax. The Tribunal found that the assessee failed to provide any proof of the claim that the return was ready before the due date and did not make any efforts to pay the tax, indicating a conscious disregard of obligations.

5. Ultimately, the Tribunal upheld the penalty imposed by the ITO and confirmed by the AAC, dismissing the appeal of the assessee. The Tribunal found the assessee guilty of failing to file the return without reasonable cause and acting in conscious disregard of obligations, leading to the imposition of the penalty under section 271(1)(a).

6. In conclusion, the Tribunal's decision affirmed the penalty imposed on the assessee for the delay in filing the return of income, emphasizing the importance of complying with statutory requirements and obligations under the Income Tax Act.