1982 (4) TMI 83 - AT - Income Tax

Summary

Issues:
1. Assessment year 1968-69 penalty proceedings under s. 271 (1)(a) of the IT Act, 1961.
2. Failure to file return within the specified time.
3. Acceptance of explanation for delay in filing return.
4. Imposition of penalty under s. 271 (1)(a) of the IT Act, 1961.
5. Applicability of the decision in the case of Addl. CIT vs. I.M. Patel & Co.

Analysis:
The judgment pertains to an appeal by the assessee for the assessment year 1968-69 concerning penalty proceedings under section 271(1)(a) of the IT Act, 1961. The original assessment was completed on a total income of Rs. 9,690, with a subsequent reassessment resulting in a total income of Rs. 45,790. The penalty proceedings were initiated by the Income Tax Officer (ITO) at the time of completing the reassessment.

The assessee contended that the delay in filing the return was due to health reasons, specifically abdominal diseases that required bed-rest for a year. The ITO, however, found the explanation unsatisfactory and imposed a penalty of Rs. 3,420 under section 271(1)(a) of the IT Act, 1961. The Appellate Authority Commissioner (AAC) upheld the penalty, stating that the assessee failed to provide evidence of the alleged illness preventing timely filing.

Before the Tribunal, the appellant argued that the Revenue had not established the failure to file the return without a reasonable cause. The appellant relied on a previous decision and maintained that the explanation provided was reasonable and not disproved. The Departmental Representative reiterated the lack of evidence supporting the assessee's contention.

The Tribunal considered the submissions and reviewed the entire record. It noted that the ITO did not demand evidence from the assessee to support the explanation provided. The Tribunal found the explanation reasonable and probable, emphasizing that there was no evidence to suggest it was false or improbable. Citing the decision in the case of I.M. Patel & Co., the Tribunal concluded that the penalty order was not sustainable and subsequently canceled the penalty.

In conclusion, the Tribunal overturned the penalty imposed under section 271(1)(a) of the IT Act, 1961, based on the assessee's reasonable explanation for the delay in filing the return and the lack of evidence indicating intentional default.