1979 (2) TMI 137 - AT - Income Tax

Summary

Issues:
- Appeal against penalty under section 271(1)(A) confirmed by AAC.
- Alleged default in filing return for the assessment year 1970-71.
- Submission of the assessee regarding the reasons for the delay in filing the return.
- Evidence and arguments presented by both parties.
- Examination of circumstantial evidence and relevant documents.
- Decision on whether penalty under section 271(1)(A) is warranted.

Detailed Analysis:

The appeal before the Appellate Tribunal ITAT Jabalpur was filed by the assessee against the penalty imposed by the ITO under section 271(1)(A), which was confirmed by the AAC. The ITO initiated proceedings under section 271(1)(A) due to the delayed filing of the return for the assessment year 1970-71. The assessee argued that the delay was due to the failure of their counsel to file the return, despite providing necessary documents. The AAC rejected this submission citing lack of evidence. The appeal before the Tribunal challenged this decision (para 2-3).

During the appeal hearing, the assessee's counsel reiterated that the return was given to the previous counsel in time, but it was not filed. The assessee claimed to have changed counsel upon realizing the default. The counsel argued that the partnership deed and subsequent returns were filed on time, indicating a bona fide belief that the return for 1970-71 was also filed. The Department presented an order-sheet noting by the ITO, indicating the filing of a duplicate return (para 4-5).

The Tribunal examined the circumstantial evidence, including the filing of returns for other years and the partnership deed. It noted the absence of documented proof of filing but emphasized the proper maintenance of registers by the Income Tax Office. The Tribunal found that the ITO had not consulted the receipt register before imposing the penalty, leading to doubts about the alleged default. Based on the evidence and arguments presented, the Tribunal concluded that there was sufficient cause to cancel the penalty under section 271(1)(A) (para 5-6).

As a result, the Tribunal allowed the appeal, overturning the penalty order imposed by the ITO. The decision was based on the assessment of the evidence and the finding that the penalty was not warranted in this case (para 6-7).