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Issues Involved:
1. Penalties under section 271(1)(a) for the assessment years 1981-82 and 1982-83. 2. Penalties under section 271(1)(b) for the assessment years 1981-82 and 1982-83. Detailed Analysis: (A) Penalties under section 271(1)(a) Assessment Year 1981-82 [ITA No. 7006(Del.)/88] 1. Facts and Explanation by Assessee: - The assessee was required to file its return by 31-7-1981 but filed it on 29-3-1984, defaulting by 31 months. - The delay was explained due to labour problems in its sister concern, M/s. Anand Synthetics Pvt. Ltd., which prevented the finalization of accounts. - The assessee sought extensions and eventually filed the return on an estimate basis due to the lack of information. 2. Arguments: - The assessee's counsel argued that the explanation was plausible and supported by the conduct of filing extension applications. - The department representative contended that the return could have been filed on an estimate basis within the prescribed time. 3. Tribunal's Findings: - Penalty proceedings are quasi-criminal, requiring a balance of probabilities rather than proof beyond a reasonable doubt. - The tribunal found the assessee's explanation credible, noting that the labour unrest and disputes among partners were valid reasons for the delay. - The assessee acted reasonably under the circumstances and was not fraudulent or contumacious. 4. Conclusion: - The tribunal held that the assessee was prevented by reasonable cause from filing the return on time and thus cancelled the penalty under section 271(1)(a) for the assessment year 1981-82. Assessment Year 1982-83 [ITA No. 7009(Del.)/88] 1. Facts and Explanation by Assessee: - The return was required by 31-7-1982 but was not filed until the assessment on 5-3-1985. - The delay was again attributed to the same reasons as the previous year. 2. Arguments: - The same arguments were presented as for the previous year. - The assessee's counsel additionally argued that the period of default covered by the penalty for the previous year should not be considered again. 3. Tribunal's Findings: - The tribunal agreed that the reasonable cause for the delay extended up to 29-3-1984. - However, no satisfactory explanation was provided for the period after 29-3-1984. - The tribunal concluded that the assessee acted fraudulently or contumaciously for the period after 29-3-1984. 4. Conclusion: - The penalty for the assessment year 1982-83 was directed to be levied at the minimum for 10 months, modifying the appellate order accordingly. (B) Penalties under section 271(1)(b) [ITA Nos. 7007 & 7008 (Del.) of 1988] 1. Facts and Explanation by Assessee: - Penalties were levied for failing to comply with statutory notices. - The assessee cited labour troubles and disputes among partners as reasons for non-compliance. 2. Arguments: - The assessee's counsel argued that the default was not deliberate but due to unavoidable circumstances. - The department representative maintained that no satisfactory explanation was provided. 3. Tribunal's Findings: - The tribunal noted that similar circumstances in the sister concern had been accepted as sufficient cause by the CIT (Appeals). - The tribunal found that the assessee's conduct was not tainted with mala fide intent. 4. Conclusion: - The penalties under section 271(1)(b) for both years were cancelled. Final Judgments: 1. Penalty under section 271(1)(a) for assessment year 1981-82: - Cancelled, appeal allowed. 2. Penalty under section 271(1)(a) for assessment year 1982-83: - Directed to be levied at the minimum for 10 months, appeal partly allowed. 3. Penalties under section 271(1)(b) for assessment years 1981-82 and 1982-83: - Cancelled, appeals allowed.
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