1982 (3) TMI 146 - AT - Income Tax

Summary

Issues:
- Appeal against order confirming penalty under section 272(1)(a)
- Sufficiency of evidence supporting late filing of return due to counsel's default
- Compliance with judicial requirements in imposing penalty
- Consideration of submissions and cause shown by assessee
- Application of mind by the Income-tax Officer (ITO) in penalty imposition

Analysis:
The appeal was filed by the assessee against the order of the Appellate Assistant Commissioner (AAC) confirming the penalty imposed by the Income-tax Officer (ITO) under section 272(1)(a). The ITO directed the assessee to pay a penalty of Rs. 24,563 after being satisfied that it was a fit case for penalty. The AAC upheld the order, noting the lack of evidence supporting the claim that the delay in filing the return was due to the counsel's default. The AAC found no evidence to support this contention and dismissed the appeal.

The assessee argued that the penalty order was not sustainable as the ITO did not meet the judicial requirements in dealing with the quasi-judicial matter and failed to provide a speaking order. The assessee's counsel contended that the ITO did not specify the starting point of the default, did not address the submissions made in the written reply, and did not call for supporting proof regarding the counsel's lapse. The assessee relied on legal precedents to support their case and argued that the delay was due to the counsel being detained during an emergency.

The Departmental Representative (D.R.) supported the AAC's order, arguing that the delay was not due to a reasonable cause and that the penalty was rightly imposed. However, upon review, the Appellate Tribunal found merit in the assessee's submissions. It was observed that the ITO did not adequately consider the submissions and facts presented by the assessee, and the penalty was imposed without sufficient evidence or application of mind. The Tribunal concluded that the penalty order lacked proper justification and canceled the AAC's decision, thereby allowing the appeal by the assessee.

In conclusion, the Tribunal held that the penalty imposed on the assessee was unjustified due to the lack of adequate materials and application of mind by the ITO. The decision to cancel the penalty was based on the failure to consider the submissions made by the assessee and the absence of supporting evidence for the counsel's default leading to the delay in filing the return.