1978 (6) TMI 74 - AT - Income Tax

Summary

Issues:
1. Assessment year 1974-75: Penalty imposed under section 271(1)(a) of the Income Tax Act for delay in filing the return.
2. Assessment year 1975-76: Penalty imposed under section 271(1)(a) of the Income Tax Act for delay in filing the return.

Analysis:
1. For the assessment year 1974-75, the assessee, a firm, filed its return after a delay of about 20 months. The Income Tax Officer (ITO) initiated penalty proceedings under section 271(1)(a) of the Act due to the delay. The assessee provided explanations related to dependency on firms for income information and partners' unavailability for reconciliation. The ITO found the explanations unsatisfactory and imposed a penalty. The Appellate Authority Commissioner (AAC) upheld the penalty. However, the Tribunal considered the reasons provided by the assessee as reasonable, noting that the returns were filed once the necessary information was available. The Tribunal found no deliberate intention to delay and canceled the penalty.

2. In the assessment year 1975-76, the assessee again filed the return after a delay of 18 months. The ITO initiated penalty proceedings under section 271(1)(a) of the Act. The assessee reiterated the same reasons as in the previous year. The ITO imposed a penalty, which was upheld by the AAC. The Tribunal, after reviewing the explanations and circumstances, found that the reasons for the delay were genuine and beyond the assessee's control. The Tribunal noted that the returns were filed promptly upon receiving the necessary information. It was highlighted that the ITO did not impose a penalty for the delay under section 139(2) of the Act. The Tribunal concluded that there was no justification for sustaining the penalty and thus canceled the penalty for this assessment year as well.

In both cases, the Tribunal emphasized that the delays were due to genuine difficulties faced by the assessee, and there was no evidence of deliberate intention to delay the filing of returns. The Tribunal found the explanations provided by the assessee to be reasonable and accepted that the delays were a result of circumstances beyond the assessee's control. The Tribunal overturned the penalties imposed by the lower authorities, emphasizing the lack of justification for upholding the penalties.