1980 (8) TMI 125 - AT - Income Tax

Summary

Issues:
1. Appeal against penalty under section 271(1)(a) and 271(1)(c) for the assessment years 1966-67 to 1971-72.
2. Omission to declare income from properties.
3. Mens-rea in concealing income.
4. Justification for penalty under section 271(1)(a) for not filing the return of income in time for the assessment year 1971-72.
5. Reasonable cause for delay in filing the return of income.

Analysis:
1. The appeals pertain to penalties imposed under sections 271(1)(a) and 271(1)(c) for the assessment years 1966-67 to 1971-72. The issue primarily revolves around the omission to declare income from properties, specifically No. 20, Sunnambukaran Street, and Virinjipuram Lalu Saheb Street. The assessee argued that the income was inadvertently omitted and no mens-rea could be attributed to the omission, seeking cancellation of penalties.

2. The Tribunal considered the submissions and noted that the assessee had voluntarily disclosed the sources of investment in the properties. It was observed that the mere admission of the source of investment does not absolve the obligation to declare income. However, the Tribunal found merit in the assessee's argument that the omission was inadvertent rather than deliberate, as no mens-rea was established. Consequently, the penalties under section 271(1)(c) were deemed unwarranted for the assessment years in question.

3. In the appeal concerning the assessment year 1971-72, the penalty under section 271(1)(a) was challenged for not filing the return of income on time. The assessee cited reasons such as ill health and the inability to gather particulars due to reopened assessments. The Tribunal noted that while the assessee failed to provide evidence of ill health, no such evidence was mandated. It was found that a reasonable cause existed for the delay up to a certain period, and the same cause could be extended for the subsequent period. The Tribunal held that there was no evidence to suggest willful neglect or deliberate avoidance in filing the return, ultimately ruling in favor of the assessee based on established principles.

4. The Tribunal, considering the circumstances and the absence of evidence contradicting the assessee's explanation, concluded that there was no justification for the levy of the penalty under section 271(1)(a) for the assessment year 1971-72. Consequently, all the appeals were allowed in favor of the assessee.