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Issues:
1. Imposition of penalty under section 271(1)(A) of the Income Tax Act, 1961 for late filing of return. Detailed Analysis: The appeal was filed by the assessee against the penalty imposed by the Appellate Assistant Commissioner under section 271(1)(A) of the Income Tax Act, 1961. The facts of the case revolved around the issuance of a notice under section 139(2) by the Income Tax Officer, which was served on the assessee after a delay in filing the return. The assessee had applied for an extension of time to file the return, which was granted until 31st July, 1971. However, the return was ultimately filed on 14th September, 1971, resulting in the imposition of a penalty of Rs. 5,110 for the delay. Upon appeal, the Appellate Assistant Commissioner upheld the penalty, stating that the assessee should have filed the return by 1st October, 1971, or applied for another extension if unable to do so. The Appellate Assistant Commissioner highlighted that it was the duty of the assessee to inquire about the status of the extension application and that the Income Tax Officer was justified in treating the assessee in default. During the hearing, both counsels presented their arguments. The Tribunal observed that the assessee had applied for an extension of time until 30th September, 1971, which was granted. The return was filed within the extended time, indicating no default on the part of the assessee. The Tribunal noted that the Income Tax Officer did not communicate the extension approval to the assessee, leading to a misunderstanding. The Tribunal concluded that the assessee acted diligently by applying for an extension and filing the return within the extended period, thus canceling the penalty imposed by the Income Tax Officer and allowing the appeal filed by the assessee.
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