1977 (4) TMI 64 - AT - Income Tax

Summary

Issues:
1. Imposition of penalty under section 271(1)(a) of the IT Act, 1961 for delay in filing the return for the assessment year.
2. Imposition of penalty under section 273 of the IT Act, 1961 for not furnishing an estimate of advance tax payable for the year.

Detailed Analysis:
1. The appeals were filed by the assessee against the penalties imposed under sections 271(1)(a) and 273 of the IT Act, 1961 for the assessment year 1974-75. The delay in filing the return by three months led to the initiation of penalty proceedings under section 271(1)(a) by the Income Tax Officer (ITO). The ITO imposed a penalty of Rs. 2,910 as the assessee did not provide any explanation before him. However, before the Appellate Assistant Commissioner (AAC), the assessee explained that due to disruptions caused by floods and the absence of the firm's Accountant, the return was delayed. The AAC upheld the penalty, but the Income Tax Appellate Tribunal (ITAT) disagreed, stating that there were reasonable causes for the delay and no contumacious conduct on the part of the assessee.

2. The second issue pertained to the penalty imposed for not furnishing an estimate of advance tax payable for the year. The ITO initially initiated penalty proceedings under section 273(a) but imposed the penalty under section 273(d). The AAC upheld the penalty under section 273A(1)(c), which the assessee challenged before the ITAT. The ITAT found that the penalty was imposed on a charge different from the one initially leveled against the assessee and without giving them a reasonable opportunity to be heard. The ITAT also noted that the estimate filed by the assessee was bona fide, and there was no evidence to suggest that the assessee knowingly provided false information. Therefore, the ITAT concluded that the penalty could not be sustained and canceled the impugned orders of penalty.

In conclusion, the ITAT allowed both appeals, canceling the penalties imposed under sections 271(1)(a) and 273 of the IT Act, 1961 for the assessment year 1974-75.