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Issues: Penalty under section 271(1)(a) of the IT Act for failure to file the return on time.
In this case, the appeal was filed against the penalty of Rs. 4,050 imposed by the Income Tax Officer (ITO) under section 271(1)(a) of the Income Tax Act for the assessment year 1975-76. The ITO had completed the assessment on a total income of Rs. 67,410, and the return of income, due on 30th June 1975, was filed by the assessee on 31st December 1975. The assessee, a business firm, had applied for an extension of time for filing the return up to 31st September 1975. Despite the application for extension, the penalty proceedings were initiated by the ITO, and the penalty was upheld by the Appellate Assistant Commissioner (AAC) on the grounds that the assessee failed to demonstrate a reasonable cause for the delay in filing the return. During the appeal, the assessee argued that there was a reasonable cause for the delay in filing the return, citing reasons such as the illness of the accountant, the need for finalizing accounts, and the timely filing of the return within four months. The departmental representative, however, contended that the assessee had not proven a reasonable cause for the default, emphasizing that the return was filed only after a notice under section 139(2) was issued, not voluntarily. After considering the arguments and facts presented, the Appellate Tribunal held that the penalty under section 271(1)(a) was not justified in this case. The Tribunal found that there was no default on the part of the assessee in complying with the notice under section 139(2) as the return was filed on the last day of December 1975. The Tribunal also noted that the assessee had applied for extensions of time to file the return, showing a conscious effort to fulfill statutory obligations. The Tribunal accepted the explanation provided by the assessee regarding the delay in filing the return due to the illness of the accountant, stating that it was a reasonable cause for the default. Ultimately, the Tribunal concluded that the penalty levied by the ITO and confirmed by the AAC was unwarranted, and therefore, the penalty was canceled. As a result, the appeal by the assessee was allowed, and the penalty under section 271(1)(a) was set aside.
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