1982 (4) TMI 133 - AT - Income Tax

Issues Involved:
1. Delay in filing returns for assessment years 1968-69 to 1971-72.
2. Penalty under Section 271(1)(a) of the Income-tax Act, 1961.
3. Ignorance of law as a defense.
4. Nature of receipt from Mr. K.K. Jajodia.
5. Impact of search and seizure operations on filing returns.
6. Effect of penalties imposed by the Metropolitan Magistrate.
7. Reliance on previous Tribunal decisions and High Court judgments.

Detailed Analysis:

1. Delay in Filing Returns:
The assessee filed returns for the assessment years 1968-69, 1969-70, 1970-71, and 1971-72 on 1-12-1972, 1-12-1972, 7-2-1973, and 7-2-1973, respectively, significantly later than the due dates of 30-9-1968, 30-9-1969, 30-9-1970, and 30-9-1971. The delay periods were 50, 38, 28, and 16 months, respectively.

2. Penalty Under Section 271(1)(a):
The ITO issued notices under Section 271(1)(a) due to the delayed filings. The assessee's failure to comply with initial notices led to penalties of Rs. 51,976, Rs. 77,375, Rs. 32,105, and Rs. 26,380 for the respective years.

3. Ignorance of Law as a Defense:
The assessee claimed ignorance of Section 139 provisions. However, the Tribunal cited the Madras High Court ruling in Swaminathan Aiyar, asserting that ignorance of law is no excuse. The Tribunal noted that the assessee, with income from multiple sources, could not credibly claim ignorance of tax laws.

4. Nature of Receipt from Mr. K.K. Jajodia:
The assessee contended that the money received from Mr. K.K. Jajodia for liaison work was a capital receipt, not taxable income. The Tribunal rejected this, noting the assessee's understanding of tax laws and differentiation between revenue and capital receipts.

5. Impact of Search and Seizure Operations:
The assessee argued that the search and seizure operation on 25-5-1972, which led to the seizure of books and records, constituted a reasonable cause for the delay. The Tribunal found this unconvincing, stating that the returns could have been filed earlier through inspection of the seized records. The Tribunal distinguished this case from the Orissa High Court ruling in Dilsukhrai Ranglal, where the seizure period overlapped with the filing period.

6. Effect of Penalties Imposed by the Metropolitan Magistrate:
The assessee claimed that the Rs. 5,000 penalty imposed by the Metropolitan Magistrate under Section 276C should preclude further penalties under Section 271(1)(a). The Tribunal, referencing the Delhi High Court's ruling in Gulab Chand Sharma, held that separate proceedings under the Income-tax Act and criminal law do not constitute double jeopardy.

7. Reliance on Previous Tribunal Decisions and High Court Judgments:
The assessee cited the Tribunal's decision in Rachna and various High Court rulings. The Tribunal distinguished these cases based on facts, particularly noting that the returns were filed after the search and seizure, and the assessee could have filed them earlier through inspection. The Tribunal also referenced the Full Bench decision of the Punjab and Haryana High Court in Patram Dass and the Madhya Pradesh High Court in Sharmishthabai Holkar, emphasizing the assessee's burden to show reasonable cause for the delay.

Conclusion:
The Tribunal upheld the Commissioner (Appeals)'s order, confirming the penalties for all assessment years under appeal. The appeals by the assessee were dismissed, as the Tribunal found no reasonable cause for the delayed filings and rejected all contentions raised by the assessee.

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