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TMI Blog1985 (1) TMI 123X X X X Extracts X X X X X X X X Extracts X X X X ..... ssees filed their return for the asst. yr. 1978-79. The ITO in the assessment proceedings found that the returns were belated and, therefore he initiate the penalty proceedings before completion of assessment under s. 271 (1)(a) of the IT Act, 1961 (hereinafter referred to as the Act) for late filing of the returns. 3.1 In pursuance of it, the ITO issued notice under s. 271 (a) (a) read with s. 274 as to show-cause why the assessees should not be penalised for late filing of the returns. The assessees explained that the late filing of the returns were under sufficient cause and reason: showing therein that in the case of M/s. Hari Chand Jai Ram Shah M/s. Hari Chand Jai Ram Shah Co. in which they were partners: the Department conducted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on for extenuation of time were rejected by the ITO that the reason for seeking the extension was that the Department had taken action under s. 132 in August, 1977 when accounts books and other documents were seized and the books and documents remained in the custody of the Department upto day that the material for preparation of the firm in which the assessee were partners had not yet been finalised, and, therefore the time for extension was sought, which was rejected by the ITO and his action was Ipso facto; to levy the penalty was without jurisdiction. Reliance was placed on the decision in the case of CIT vs. Ramkrishna Son (P) Ltd. (1982) 29 CTR (Mad) 78. It was further contended that since the firm in which the assessees were partne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owing decisions: N. N. Subramania Iyer vs.Unionof India Anr. (1974) 97 ITR 228 (Ker) P. N. Sikand vs. CIT Nathmul Girdharilal vs. CIT (1980) 18 CTR (Del) 307 : (1980) 126 ITR 202 (Del) Omkar Estate Corpn. vs. CIT (1982) 138 ITR 635 (Guj). It is further contended that the notices issued on the assessee are not valid notice, the copy of which are there at p. 4 of the paper book. It is also contended that for levying penalty under s. 27 (1)(a) it is for the Revenue to prove the mens rea on the part of the assessees. 6. On the other hand, the ld. Departmental Representative contends that it is settled law that each day of delay is to be explained in late filing of the returns And the onus is upon the assessee which is not discharg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance can be placed on the decision of the Hon ble Supreme Court in the case R. s. Joshi vs. Ajit Mills 1977 CTR (SC) 354 : AIR 1977 SC 2279 where their Lordships observed as under: "The notion that a penalty or a punishment cannot be case in the form of an absolute or no fault liability but must be preceded by mens rea must be rejected. The classical view that no mens rea no crime has long ago been eroded especially regarding economic crimes. Therefore, to contention that s. 37(1) fastens a heavy liability regardless of fault has no force in depriving the for feature of a character of penalty." The Lordships further observed in para 24 in the aforesaid judgment that in a developing country, there is sufficient nexus between the power to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chever is earlier. The issue of a notice under s. 139(2) cannot per se have the effect of wiping out the earlier period of default. This can be done only be expressly condoning the delay. 8.1 In the case of CIT vs. Dilsukhrai Ranglal (1976) 104 ITR 60 (Ori), their Lordships of Orissa High Court held that the burden is on the assessee to show reasonable cause for delay in complying with the statutory requirements of making a return of income within the time specified. the finding of the Tribunal holding therein that the delay in finalising the accounts is sufficient and reason for late filing of return and therefore, whatever period is determined by the Tribunal for this purpose is finding of fact and the Hon ble High Court is not within t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k marked in it are as under: "..........have without cause failed to furnish the return of income which you were required to furnish by a notice given under s. 22(1)/22(3)/34 of the Indian IT Act 1922 or which you were required to furnish under s. 139(1) or by a notice given under s. 139(2)/ 148 of the IT Act, 1961, No. dated or have without reasonable cause failed to furnish it within the time allowed and in the manner required by the said s. 139 (1) or by such notice. You are hereby requested to appear before me at 4/14 Asp AC., Rd Delhi, 11A. M. on20th Feb., 1981and show cause why an order imposing a penalty on you should not be made under s. 271 of the IT Act, 1961. If you do not wish to avail yourself of this opportunity of being h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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