1981 (11) TMI 105 - AT - Income Tax

Summary

Issues:
1. Levy of penalty under section 271(1)(a) of the IT Act, 1961 for the assessment year 1973-74.
2. Determination of whether the delay in filing the return was without reasonable cause.

Analysis:
The appeal before the Appellate Tribunal ITAT MADRAS-A was against the penalty imposed under section 271(1)(a) of the IT Act, 1961 amounting to Rs. 1,342 for the assessment year 1973-74. The assessee, a partner in a firm, claimed to have filed the return on 27th November, 1973, but the Income Tax Officer (ITO) stated that the return filed on 9th March, 1976, was the only return available on record. The ITO required an explanation for the delay, to which the assessee did not respond, leading to the penalty imposition by the ITO.

The Appellate Assistant Commissioner (AAC) upheld the penalty, rejecting the assessee's claim that the return filed in 1976 was a duplicate return. The AAC noted that there was no indication on the return to support the claim of duplication. The representative for the assessee argued that the delay was due to a misplaced document and presented circumstantial evidence to support the claim that the return was indeed filed in 1973, along with the firm's return and other partners' returns on the same date.

The Tribunal considered the evidence presented by the assessee's representative and agreed that it was unlikely for the return not to have been filed in 1973, especially when all other related returns were filed simultaneously. The Tribunal found no motive for delaying the return to avoid tax payment, as the income difference was due to unforeseen additions in the firm's income. The Tribunal accepted the contention that the return filed in 1976 was a duplicate and that the delay was justified due to the firm's delayed filing. Given the circumstances and the dropped penalty for another partner, the Tribunal concluded that the delay was reasonable, unjustifying the penalty imposition.

In conclusion, the Tribunal allowed the appeal, canceling the penalty, as it found the delay in filing the return by the assessee was not without reasonable cause, considering the circumstances and evidence presented.