9911796707
TMI Blog1993 (11) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... income only on 1-3-1989, i.e., after a delay of 31 months with a covering letter as follows :--- "From M/s. Narayanan & Co., Edappally. To The Asstt. Commissioner of Income-tax (Asst.), Investigation Circle, 1, Ernakulam. Sub :---Filing of Income-tax return --- Ref. PY 8289 --- Assessment year 1986-87--- Sir, We are filing herewith our return of income for the assessment year 1986-87. As we have misplaced and lost our account books and the same is found to be not traceable we are estimating our income on the basis of the total quantity of the arrack sold during the year. A statement showing the income estimated is filed along with the return. We have filed Form No. 12 on 30-7-1986 before the Income-tax Officer, D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be levied. The explanation on behalf of the assessee was that their relevant books of accounts were either misplaced or lost and this has caused the delay in filing the return. The Assessing Officer, concluded that the explanation offered by the assessee was false. According to him the assessee had filed the return estimating the income from arrack sales at Rs. 2.50 per litre on the total quantity of arrack lifted from the excise authorities. The curry sales from the various shops was also estimated. At the time of assessment also, the assessee stated that they had not maintained any books of account for the business during the previous year and the income has been estimated by the assessing authorities and the estimate was substantially upheld by the CIT (Appeals). He further held that the assessee was a habitual defaulter in filing the return of income. The delay in filing the return for the earlier three years are as under : Assessment year &n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Supreme Court as per its order dated 14-2-1986. When the matter was entrusted to the CBI, the CBI moved the High Court to cancel the bail granted to the accused. The High Court has ordered in Criminal M.C. 533/1987 dated 10-8-1987 that the first respondent, Shri P.K. Narayanan, be arrested and committed to the custody. It was further directed that the Sessions Judge dealing with the trial of his case was free to order his release on bail after completion of the examination of the principal witnesses for prosecution, on such conditions as he deems fit. The commitment was made on 24-4-1987 and the trial was commenced on 10-8-1987 and closed on 25-3-1988. He was in jail till 1991. The Supreme Court in CRL. M.P. No. 949 of 1991 in Criminal Appeal No. 315 of 1990 directed that Shri P.K. Narayanan be released on bail on his executing a bond in the sum of Rs. 15,000 with two sureties in the like amount to the satisfaction of the Additional Sessions Judge, Ernakulam. Shri Narayanan became ill and was mentally very much up-set. His eldest son, who is also one of the partners of the assessee-firm was studying in College. Other two sons are minors and remaining two are daughters. Becau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11-1988 posting the case to 14-11-1988. All these opportunities were not availed of by the assessee. Hence the explanation offered by the assessee will not be a sufficient cause for delay and the penalty has to be sustained. 6. Thus. we have heard rival submissions. The only point that arises for our consideration is whether there was any reasonable cause for the delay of 31 months in filing the return of income for the assessment year 1986-87. Admittedly, the assessee is a partnership firm consisting of six partners. Their names and respective shares in profits/losses are as follows :--- 1. Shri P.K. Narayanan 30% 2. Shri A.R. Vasudevan 25% 3. Shri T.C. Balan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... position to look into day-to-day affairs of the firm and to prepare the return of income and furnish the same in time. An accused in a murder case will be more worried about the outcome of trial than anything else. The argument that in the absence of Shri Narayanan, any of the partners could have filed the return of income as envisaged under section 140(cc) is also not available for the reason that his wife and son were cited as witnesses for the prosecution. Further it is reasonable to hold that the investigations against Shri Narayanan leading to his arrest and trial for murder might have caused great agony, tension, stress and strain to the wife and son who were partners-cum-prosecution witnesses. It has not been shown that the other partners outside the family of Shri Narayanan were actively engaged in the conduct or management of the business of the firm, such as to ascertain to its income for purpose of filing the return of its income though under clause 12 of the partnership deed the firm can be represented by any of the partners. 7. Moreover the assessee had been consistently pleading before the Assessing Officer right from the stage of filing of the return that its books ..... X X X X Extracts X X X X X X X X Extracts X X X X
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