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Issues: Penalty under s. 271(1)(a) of the IT Act, 1961 for delayed filing of return of income for asst. yr. 1968-69.
Analysis: The dispute in the case revolved around the penalty of Rs. 2056 imposed under section 271(1)(a) of the Income Tax Act, 1961 for the delayed filing of the return of income for the assessment year 1968-69. The Income Tax Officer (ITO) found that the return was filed after a delay of 8 completed months without a plausible explanation, leading to the imposition of the penalty at Rs. 3290. The assessee contended that applications for extension of time were made, with the first application dated 1st July, 1968, supported by the counsel's register. However, the Additional Commissioner of Income Tax (AAC) considered only the fourth application filed on 10th March, 1969, and recomputed the penalty at Rs. 2056, considering the default from 1st Oct., 1968 onwards. The appeal was made against the AAC's order, arguing that the assessee had diligently applied for extensions up to 31st March, 1969, citing reasons for the delay related to the unexpected death of the accountant who had the books of account. The counsel contended that the applications for extension were reasonably evidenced, and the delay was not intentional, urging for the cancellation of the penalty. The Departmental Representative supported the AAC's decision. Upon considering the submissions, the Appellate Tribunal emphasized that a penalty under section 271(1)(a) cannot be levied solely based on the occurrence of a default; it must be established that the delay was without reasonable cause. The Tribunal noted that the assessee had filed applications for extension of time, with one application supported by the counsel's register and others sent via certificate of posting. The Tribunal found no reason to doubt the filing of these applications and accepted the circumstances leading to the delay as explained by the assessee. Ultimately, the Tribunal concluded that the delay was for a reasonable cause, and therefore, canceled the penalty, ruling in favor of the assessee. In conclusion, the appeal succeeded, and the penalty under section 271(1)(a) was canceled by the Appellate Tribunal, holding that the delay in filing the return of income was for a reasonable cause and not due to a conscious disregard of legal obligations by the assessee.
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