1978 (5) TMI 70 - AT - Income Tax

Summary

Issues:
Penalty under section 271(1)(a) of the IT Act, 1961 for delayed filing of income tax return for the assessment year 1973-74.

Detailed Analysis:

1. The case involved an appeal by the assessee against the penalty imposed by the Income Tax Officer (ITO) under section 271(1)(a) of the IT Act, 1961 for delayed filing of the income tax return for the assessment year 1973-74. The assessee filed the return 15 months late, citing reasons related to the illness of a family member and the departure of the accountant. The ITO imposed a penalty of Rs. 6,300 due to the delay.

2. The assessee appealed to the Appellate Authority Commissioner (AAC), arguing that there was a reasonable cause for the delay in filing the return. The AAC requested evidence regarding the family member's illness, which was provided, showing continuous medical treatment for both parents. The AAC found merit in the explanation provided by the assessee and reduced the penalty to Rs. 4,200, considering the circumstances and the partner's responsibilities in the firm.

3. The assessee further appealed to the Appellate Tribunal, challenging the penalty and arguing that there was a reasonable cause for the delayed filing of the return due to the family member's illness. The Tribunal noted that the AAC had already established a reasonable cause for the delay and that the penalty could not be imposed solely for not filing a petition for extension of time.

4. The Tribunal held that under section 271(1)(a) of the IT Act, a penalty is to be imposed for delay in filing the return only if there is no reasonable cause. Since the AAC had found a reasonable cause for the delay related to the family member's illness, the Tribunal concluded that the penalty could not be justified. Therefore, the Tribunal canceled the penalty imposed by the ITO, ruling in favor of the assessee.

5. In conclusion, the Tribunal allowed the appeal in full, emphasizing that the penalty for delayed filing of the return could not be levied when there was a reasonable cause established for the delay, as determined by the AAC. The decision highlighted the importance of considering the circumstances and reasons behind the delay before imposing penalties under the IT Act.