1978 (8) TMI 108 - AT - Income Tax

Summary

Issues:
1. Late filing of income tax returns for the assessment years 1963-64 and 1964-65.
2. Imposition of penalties by the Income Tax Officer (ITO) for late filing.
3. Appeal to the Appellate Assistant Commissioner (AAC) and subsequent appeal to the Tribunal.
4. Contention regarding reasonable cause for late filing and negligence of the accountant.
5. Arguments by the Departmental Representative challenging the assessee's explanation.
6. Assessment of whether there was a reasonable cause for the delay in filing the returns.

The judgment deals with two appeals filed by the assessee for the assessment years 1963-64 and 1964-65, concerning the late filing of income tax returns. The Income Tax Officer imposed penalties for the late filing, which were reduced by the Appellate Assistant Commissioner (AAC) upon appeal. The assessee then appealed to the Tribunal, claiming a reasonable cause for the delay due to the accountant's negligence. The Departmental Representative argued that the explanation provided was vague and lacked substantiation. The Tribunal considered whether there was a reasonable cause for the delay, emphasizing that penalties should not be levied if the assessee did not act in utter disregard of legal obligations. The Tribunal agreed with the assessee's representative, noting that the delay was due to the accountant's negligence and that there was a reasonable cause for the late filing. Consequently, the penalties were deleted, and the appeals were allowed.