2007 (4) TMI 331 - HC - Income Tax

Penalty- the petitioner had admittedly not filed his returns within time for the assessment years 1983-84 and 1984-85. The assessee filed the return for the assessment year 1983-84 on August 7 1985 whereas the due date was July 31 1983. For the assessment year 1984-85 the due date was July 31 1984 but the return was filed on August 9 1985. It appears that the returns were actually filed after some survey was conducted and the assessee surrendered an income of Rs. 1 lakh for each of the assessment years. A penalty of Rs. 35, 195 was levied for late submission of the return for the year 1983-84 and Rs. 18, 385 for the assessment year 1984-85. The assessee had filed appeals against the orders of levying penalty and these appeals being I. T. As. Nos. 877 and 878 were dismissed on May 14 1993 by the Income-tax Appellate Tribunal here in after to be referred as the Tribunal . The Tribunal came to the conclusion that the assessee had not made any request for extension of time and also held that there was no material on record to support the case. Held that- the Tribunal had granted tie upto September 30 1983 as sought by the assessee in the application. There was no material on record showing that the managing partner was under treatment and was not attending to business after September 1983. There was neither any prayer nor explanation seeking extension of time after September 30 1983 hence no further extension of time could have been granted.

Summary

Issues:
- Interpretation of penalty under section 271(1)(a) of the Income-tax Act, 1961 for late filing of returns for assessment years 1983-84 and 1984-85.
- Consideration of reasonable and sufficient cause for not filing the return in time.
- Evaluation of the application for extension of time due to managing partner's health condition.

Analysis:
1. The judgment addressed the issue of whether the Tribunal was correct in upholding the penalty imposed under section 271(1)(a) of the Income-tax Act, 1961 for late filing of returns for the assessment years 1983-84 and 1984-85. The Tribunal concluded that there was no reasonable and sufficient cause for the delay in filing the returns.

2. The court observed that the assessee had not filed the returns within the stipulated time for both assessment years. The returns were filed after some survey was conducted, and the assessee surrendered additional income. Penalties were imposed for late submission, and the appeals against these penalties were dismissed by the Tribunal in 1993.

3. The assessee claimed that one of the partners had a heart attack, leading to the delay in filing the returns. An application for extension of time was submitted, requesting an extension until September 30, 1983, which was partially allowed by the Tribunal. The assessee then applied for reference to the High Court.

4. During the proceedings, the assessee's counsel argued that if the explanation for the initial extension was accepted, the same reasoning should apply for the remaining period. However, the court disagreed, stating that there was no evidence to support the claim that the managing partner's health condition persisted beyond the granted extension period.

5. The court emphasized that for an extension of time, the assessee must provide sufficient evidence to justify the delay in filing the returns. Since no such evidence was presented beyond the granted extension date, the court concluded that no further extension could be granted.

6. Ultimately, the court answered the reference against the assessee, stating that no extension of time could have been granted beyond the period already allowed by the Tribunal. The judgment was to be forwarded to the Tribunal for further action.

This detailed analysis of the judgment provides a comprehensive understanding of the legal issues involved and the court's reasoning in reaching its decision.