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TMI Blog1986 (10) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... 30-8-1978was sought. By the second application moved on30-8-1978extension was sought up to31-10-1978for the reason 'the dealing hand Shri K.L. Bhasin has resigned and we are handicapped for making of return of income of the above-mentioned assessment year'. There is no dispute that the extensions sought by the assessee were allowed by the ITO and that is why he has levied the impugned penalty only for a default of 20 months. 4. The ITO initiated proceedings for the levy of penalty under section 271(1)(a). The assessee-company stated that the accounts of the company were not finalised and audited in time and the man handling the accounts of the company left the services of the company on29-8-1978and the company could not get a proper replacement. According to the assessee, it was for these reasons that the return of income got delayed. The learned ITO rejected this explanation observing that the assessee did not even care to apply for extension beyond 31-10-1978; the assessee-company had vast resources and was assisted by several accountants including chartered accountants; the ground that a particular person left the services is not enough to explain the delay of 20 months; the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cured; (ii) that the accounts were under audit; (iii) that the ITO kept the assessee busy with its assessments for the assessment years 1976-77 and 1977-78 and hence the assessee could not get sufficient time to prepare its return for assessment year in question; (iv) that the Secretary of the assessee-company had died in March 1978, which also led to the delay in the filing of the return; and (v) that Smt. Sahni, the wife of one of the ex-directors of the company had also died with the result that Shri Sahni, who though not on the board of directors was assisting the company, could not attend to the company's affairs. It was further contended on behalf of the assessee that penalty could not be levied on the assessee unless the department could show that there was any contumacious conduct on the part of the assessee and that the revenue had failed to discharge the initial burden on this account. It was also contended that interest under section 139(8) of the Act amounting to Rs. 4,24,224 having been charged by the ITO, penalty under section 271(1)(a) could not be levied in view of the judgment of the Hon'ble Supreme Court in CIT v. M. Chandra Sekhar [1985] 151 ITR 433. 8. The lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble Gujarat High Court pointed out how this slight initial burden may be discharged by observing at page 230 : "The department may discharge this initial burden by leading evidence to show, for example, that the assessee had applied for extension from time to time and yet had failed to file the return within the extended time or the department may be in a position to show that the assessee concern was habitually filing returns beyond the time specified in every assessment year or on every possible occasion or the department may be able to show that the assessee was aware of the need to file the return within the time specified and yet had failed to do so." 10. The learned departmental representative did not cite any ruling to the contrary. Thus the initial burden did lay on the revenue but we have to see whether this burden stood discharged and the onus had shifted to the assessee. 11. In this case the assessee is a large public limited company which owns two sugar mills and earns large incomes. Its profit as per profit and loss account for the relevant accounting year ended on30-6-1977showed a net profit of Rs. 92,97,186. The assessee is being assessed to income-tax from befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... py of which is placed at page 79A of the paper book falsifies the allegation made in the first application for extension of time for filing the return as this certificate shows that in or about June 1978, the assessee's accounts were not under audit. This certificate also falsifies the assessee's contention that any delay was caused by the auditors. This certificate shows that the accounts were placed before the auditors in May 1980 and the audit was completed quickly within that month. The delay, therefore, was on the part of the assessee in offering the accounts for audit and there is no explanation whatsoever why the assessee did not take steps to get its accounts audited quickly after the close of the accounting year. This cause, therefore, is not made out at all and does no credit to the assessee. 14. Now we come to the assessee's third contention raised before us that the ITO kept the assessee very busy in connection with the assessee's assessment for the assessment years 1976-77 and 1977-78. The assessment for the assessment year 1976-77 was completed on14-9-1979and that for 1977-78 on25-3-1980. It is to be noted that no such cause was set up by the assessee before the ITO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntion and is rejected for the reasons discussed above. 19. In the alternative, we do not find that the death of Mrs. Sahni standing alone or in the company of other circumstances could be a sufficient cause for the delay in the filing of the return. Admittedly Shri P.C. Sahni, whose wife died after a murderous assault on18-12-1978was not a director of the company. As already stated, the return in the present case was due on30-6-1978and even if the said P.C. Sahni had some concern with the assessee, the death of Smt. Sahni could not be a cause for the delay in the filing of a return that was due on30-6-1978. 20. For the reasons discussed above, we agree with the authorities below that the assessee had no reasonable cause for the delay in the filing of the return. 21. As already stated, it was contended on behalf of the assessee that interest under section 139(8) having been charged, no penalty under section 271(1)(a) was leviable. Reliance was placed on M. Chandra Sekhar's case. That was a case pertaining to the assessment years 1959-60 to 1962-63 while in the case before us, we are concerned with the assessment year 1978-79. The provisions of sub-section (8) of section 139 we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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