1977 (10) TMI 64 - AT - Income Tax

Summary

Issues: Penalty imposition for delay in filing tax return for the assessment year 1973-74.

Analysis:
The appeal before the Appellate Tribunal ITAT Jaipur involved the imposition of a penalty on the assessee for a delay in filing the tax return for the assessment year 1973-74. The assessee, an individual, filed the return on 7th December 1973, which was four months after the due date of 31st July 1973. The Income Tax Officer (ITO) imposed a penalty of Rs. 1,334 under section 271(1)(a) of the Income Tax Act, citing the delay in filing the return. The ITO based the penalty on the fact that the assessee did not provide a valid reason for the delay beyond 30th September 1973, despite submitting extension applications.

Before the learned ITO, the assessee's extension applications for additional time to file the return were considered. While the first application for an extension up to 30th September 1973 was accepted by the ITO, the second application seeking an extension until 30th November 1973 did not receive a response. The ITO held that the assessee should have confirmed the status of the second application and that no valid reason was provided for the delay beyond 30th September 1973. The penalty was upheld by the Assistant Commissioner of Income Tax (AAC) upon appeal, as the AAC was not convinced by the assessee's explanation.

During the appeal before the Appellate Tribunal, the assessee argued that there were reasonable causes for the delay in filing the return. The assessee cited illness in the family of the accountant as a reason for the delay in finalizing the accounts, which led to the delay in filing the return. The Tribunal noted that the ITO had accepted the reasons provided by the assessee in the extension applications and found that there were reasonable causes for the delay. The Tribunal observed that there was no evidence of contumacious conduct or dishonesty on the part of the assessee in failing to file the return on time. Consequently, the Tribunal allowed the appeal and canceled the penalty imposed by the lower authorities.

In conclusion, the Appellate Tribunal held that there were valid reasons for the delay in filing the tax return for the assessment year 1973-74, as supported by the accepted extension applications and the absence of evidence of deliberate non-compliance. The Tribunal found that the penalty imposition was unwarranted, leading to the cancellation of the penalty in favor of the assessee.