1980 (6) TMI 64 - AT - Income Tax

Summary

Issues:
- Penalty imposed under section 271(1)(a) of the IT Act, 1961 for delayed filing of income tax return.
- Justification for delayed filing of return based on sufficient cause.
- Consideration of affidavit submitted by the assessee to prove sufficient cause.
- Interpretation of the Hon'ble Gauhati High Court judgment in a similar case.

Analysis:
The appeal before the Appellate Tribunal ITAT Gauhati involved a penalty imposed on the assessee, an individual, for delayed filing of income tax return under section 271(1)(a) of the IT Act, 1961. The assessee failed to file the return within the due date and was penalized by the Income Tax Officer (ITO). The penalty was confirmed by the AAC of Income-tax, leading to the appeal by the assessee.

The key contention raised by the assessee was the justification for the delayed filing of the return. The assessee argued that disputes among the partners of the firm prevented timely filing of returns. The assessee's counsel presented a revised return based on accounts, emphasizing that the delay was due to the partner's inability to obtain necessary information about his share income from the firm.

During the proceedings, the assessee submitted a sworn affidavit before the First Class Magistrate, stating the reasons for the delay in filing the return. The affidavit highlighted the disputes among partners and the lack of access to essential financial information. However, the lower authorities did not adequately consider the affidavit, leading to a lack of discussion on its contents.

The Tribunal, after reviewing the facts and the affidavit submitted by the assessee, concluded that the assessee was prevented by sufficient cause from filing the return on time. The Tribunal emphasized that the department failed to produce evidence establishing the assessee's liability for the penalty due to conscious disregard of the law. The Tribunal also referenced a judgment by the Gauhati High Court, emphasizing the burden on the department to prove the liability for the penalty.

Ultimately, the Tribunal held that the penalty imposed on the assessee was unjustified, considering the circumstances and the lack of prima facie evidence of deliberate non-compliance. The penalty was canceled, and the appeal by the assessee was allowed based on the principle that the department failed to establish the liability for the penalty adequately.