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Issues:
1. Penalty imposed under section 271(1)(a) for delayed filing of returns by a Registered Firm running a cinema. 2. Disputes within the family affecting timely filing of returns. 3. Consideration of extension applications and notices served under section 148. 4. Reasonable cause for delay in filing returns and calculation of penalties. Analysis: 1. The judgment by the Appellate Tribunal ITAT Jaipur dealt with the penalty imposed on a Registered Firm operating a cinema for delayed filing of returns. The firm, formed on 1-7-1976, faced penalties for filing returns after significant delays for the assessment years 1978-79 to 1981-82. The penalties were initiated under section 271(1)(a) by the ITO, citing reasons such as family disputes impacting the preparation of statements in accounts. The ITO observed that despite having experienced professionals and not seeking extensions, the firm delayed filing the returns, leading to penalties ranging from Rs. 18,072 to Rs. 29,952. 2. The appeal before the Appellate Assistant Commissioner (AAC) highlighted the family disputes stemming from a will executed in 1967, causing delays in filing returns. The AAC acknowledged the ongoing litigation but reduced the default period for the first two assessment years. However, penalties for the subsequent years were upheld. The Tribunal later directed the ITO to re-calculate penalties, considering the reasonable cause for delay up to specific dates for each assessment year. 3. The subsequent re-hearing of the appeals focused on the firm's submissions regarding the family disputes and the inability to file returns promptly due to ongoing litigation. The firm sought to introduce additional evidence, including the partnership deed and court orders, under rule 29 of the ITAT Rules. The Tribunal permitted the inclusion of these documents, emphasizing their relevance and authenticity. The Tribunal also delved into the necessity of filing extension applications and the impact of ongoing litigation on the firm's ability to file returns within the stipulated timelines. 4. The Tribunal's detailed analysis considered the reasons behind the delayed filing of returns, emphasizing the practical challenges faced by the firm due to family disputes and pending litigation. The Tribunal highlighted the distinction between physical ability and practical constraints in gathering necessary financial information for filing returns. Ultimately, the Tribunal concluded that a reasonable cause existed for the delay in filing returns up to 30-6-1982, leading to the waiver of penalties for certain assessment years. The recalculated penalties were based on a rough estimate due to the absence of precise evidence, resulting in the allowance of some appeals and partial allowance of others. In conclusion, the judgment by the Appellate Tribunal ITAT Jaipur provided a comprehensive analysis of the issues surrounding the delayed filing of returns by the Registered Firm, emphasizing the impact of family disputes and ongoing litigation on the firm's ability to comply with tax regulations. The decision to waive penalties for certain assessment years was based on the recognition of a reasonable cause for the delays, highlighting the importance of practical considerations in tax compliance matters.
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