1980 (4) TMI 160 - AT - Income Tax

Summary

Issues:
- Delay in filing the return under s. 139(1) for the assessment year 1973-74
- Imposition of penalty under s. 271(1)(a) by the ITO
- Agreement of the AAC with the ITO's decision
- Assessee's contention of reasonable causes for the delay
- Departmental representative's support of the AAC's decision
- Tribunal's analysis of the evidence and decision to cancel the penalty

Analysis:
The case involves an appeal by the assessee regarding the delay in filing the return for the assessment year 1973-74, resulting in a penalty under s. 271(1)(a) imposed by the ITO. The ITO initiated penalty proceedings due to a delay of 36 months in filing the return. The assessee claimed that the delay was due to the omission or default of the counsel, supported by an affidavit. The ITO, after not receiving required information, imposed a penalty of Rs. 1,010. The AAC concurred with the ITO's decision.

Before the Tribunal, the assessee contended that there were reasonable causes for the delay, stating that the return was given to the counsel on time but not filed due to a mistake. The assessee also mentioned health issues during the relevant period. The departmental representative argued that the explanation provided was not reasonable, as confirmation from the previous counsel was not submitted.

Upon review, the Tribunal found that the assessee had valid reasons for the delay. The assessee had given the signed return to the counsel on time, but it was not filed promptly. The Tribunal noted that the authorities did not provide adequate opportunity to produce confirmation from the previous counsel. It was concluded that there was no negligence on the part of the assessee, and the delay was due to the counsel's mistake. The Tribunal found no evidence of conscious failure to file the return on time or dishonest conduct by the assessee. Consequently, the Tribunal deemed the penalty unjustified and canceled it, disagreeing with the AAC's decision.

In the final ruling, the Tribunal allowed the appeal, overturning the penalty imposed by the ITO.