1978 (2) TMI 113 - AT - Income Tax

Summary

Issues:
1. Condonation of delay in filing appeal against penalty imposed by ITO.
2. Imposition of penalty for non-submission of revised estimate and non-payment of advance tax.
3. Validity of penalty order due to defective notice served by ITO.
4. Reasonable cause for non-submission of revised estimate under s. 212(3A) by the assessee.

Analysis:

1. The appeal was filed by the assessee against the penalty imposed by the ITO, which was maintained by the AAC. The appeal was time-barred by 2 days, but the delay was condoned due to negligible nature, and the appeal was disposed of on merit.

2. The penalty of Rs. 1,000 was imposed by the ITO for the default of non-submission of revised estimate under s. 212(3A) of the Act and non-payment of advance tax according to the correct income estimate.

3. The AAC upheld the penalty, finding that the assessee failed to submit the estimate and pay advance tax without reasonable cause, as the difference between advance tax paid and tax payable was significant. However, in the further appeal, it was argued that the penalty order was void due to incorrect notice served by the ITO, which led to the conclusion that the penalty was not legally imposed.

4. The Tribunal found that the notice issued by the ITO was defective, rendering the penalty invalid. Additionally, it was established that there was a reasonable cause for the non-submission of the revised estimate under s. 212(3A) by the assessee, as the provision was new and the assessee, being a partner of three firms, was not informed about the estimated income from these firms. The Tribunal held that no penalty should have been imposed in this case, as there was a reasonable cause for the non-compliance.

In conclusion, the Tribunal allowed the appeal, emphasizing the invalidity of the penalty due to the defective notice and the presence of a reasonable cause for the non-submission of the revised estimate by the assessee.