1979 (4) TMI 56 - AT - Income Tax

Summary

Issues: Imposition of penalty under s. 271(1)(a) of the IT Act, 1961 for the assessment years 1970-71 and 1971-72.

Analysis:
1. Assessment Year 1970-71:
- The assessee, an individual earning income from contracts, did not file a return for the said assessment year, leading to an ex-parte assessment.
- The Income Tax Officer (ITO) imposed a penalty for failure to file the return, stating the absence of a satisfactory explanation from the assessee.
- The Appellate Authority confirmed the penalty, agreeing with the ITO's decision.
- Upon further appeal, the Appellate Tribunal noted that in previous years, no penalties were imposed for similar failures to file returns. The Tribunal found the ITO's order ambiguous regarding the explanation provided by the assessee.
- The Tribunal concluded that the penalty imposition lacked proper consideration of the facts and canceled the penalty for the assessment year 1970-71.

2. Assessment Year 1971-72:
- The assessee filed the return late for this assessment year, citing difficulties in collecting materials due to the business being outside Imphal.
- The ITO imposed a penalty, deeming the explanation unsatisfactory without providing reasons for such a conclusion.
- The Tribunal observed that the delay in filing the return was not deliberate and that there was no evidence of a conscious violation of statutory obligations.
- Considering the Department's historical leniency towards late filings and the lack of deliberate contravention, the Tribunal found the penalty imposition unjustified and canceled the penalty for the assessment year 1971-72.

3. Conclusion:
- The Tribunal allowed the appeals, canceling the penalties imposed for both assessment years based on the lack of proper consideration of explanations and the absence of evidence supporting willful default or deliberate non-compliance with statutory obligations.