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TMI Blog1991 (7) TMI 147X X X X Extracts X X X X X X X X Extracts X X X X ..... Amount of penalty levied 1979-80 31.7.1979 31.12.1979 30.8.1979 18.2.1982 29 months Rs. 47,750 1980-81 31.7.1980 31.12.1980 30.10.1980 19.2.1983 28 months Rs. 1,28,920 1981-82 31.7.1981 31.3.1982 31.10.1981 29.3.1984 28 months Rs. 42,286 1982-83 31.7.1982 Not filled upto asst. order dt 8.8.1985 31 months delay counted upto date of asst. order Rs. 47,194 3. Penalty proceedings for late submission of the returns were initiated during the course of assessment proceedings. The assessee s main plea before the Assessing Officer was that there was labour trouble in the mill of M/s Anand Synthetics Pvt. ltd. Which resulted in strikes, lay off and ultimately closure of the factory on24th Jan., 1983. It was also submitted that because the information from Anand Synthetics Pvt. Ltd. was not available in time, the returns could not be filed in time. It as also pointed out that there was strained relationship amongst the partners, who also happened to be real brothers. The Assessing Officer, howe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthormatic, but was a matter of judicial discretion and that a mere rejection of explanation was not enough. Reliance in this regard was placed on the following cases: (i) Hindustan Steel Ltd. vs. State ofOrissa(1972) 83 ITR 26 (SC); (ii) All Indian Sewing Machine Co. vs. CIT (1974) 96 ITR 206 (Mys); (iii) CIT vs. C. Shantilal Co. (1983) 141 ITR 476 (Guj) 6. For asst. yrs. 1980-81, 1981-82 and 1982-83 it was submitted in the alternative, that if the return for asst. yr. 1979-80 could not be filed in time then the returns for asst. yr. 1980-81, 1981-82 and 1982-83 had necessarily to be delayed and there was clearly a reasonable cause for not filing the return of income for those years, in time. It was vehemently argued that the Departmental authorities had not properly appreciated the difficulty encountered by the assessee firm in getting reconciliation statements of M/s Anand Synthetics Pvt. Ltd. nor had they properly appreciated the legal aspect of the matter. It was, therefore, submitted that there was no warrant for the levy of penalties and that the penalties may be either cancelled or substantially reduced. 7. The learned Deptl. Representative equally forcefully ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts on record. It is trite to say that each case has to be decided on its own facts. There is no doubt that for asst. yr. 1979-80, 1980-81 and 1981-82 the returns were filed very late. The extension applications filed by the assessee were not accepted wholly and extension was granted only upto a particular period. For asst. yr. 1982-83 no return of income was filed till the completion of assessment and so the delay was computed at 31 months. In a situation like this where there is an inordinate delay in the matter of submission of returns of income by the assessee, the onus is on the assessee to prove that there was a reasonable cause which occasioned such a delay. It is the case of an old assessee which knows its obligation to file the returns. The filing of extension applications is a proof positive of its awareness of obligation. The assessee explanation in this case mainly was that because of the a labour trouble in the factory of M/s Anand Synthetics Pvt. Ltd. the statement of accounts of that party could not be reconciled and that there were disputes amongst the partners. As regards the first limb of the submission, it may be mentioned that the assessee was maintaining books o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... position canvassed before us in this regard. 10. The slight initial burden, if any, placed on the Revenue in such penalty matters stands discharged in this case, when it can be pointed out that it was the case of an old assessee and the assessee was aware of its obligation to file the return. Therefore the burden shifts to the assessee who has to show a reasonable cause because the facts are within his special knowledge. Moreover, the explanation filed by the assessee has to be an acceptable explanation and as to be based on evidence. The mere explanation of the assessee not supported by evidence cannot have the effect of shifting the burden on to the Department nor can the Department be called upon the produce material to show that the assessee had, without reasonable cause, failed to furnish the return in time. Reliance in this regard is placed on the Allahabad High Court decision in CIT vs. Goel Engineering Corpn. (1991) 99 CTR (All) 135 : (1991) 188 ITR 461 (All). 11. As regards the legal position on which much stress has been laid by the learned counsel for the assessee it may be necessary to look into the evolution of law on the issue. 12. The learned counsel relying on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase in R.S. Joshi held that the doctrine of mens rea was not attracted to penalty proceedings under s. 271(1)(a). According to the High Court the only requirement under that section was the presence or absence of reasonable cause for the tax delinquency. The requirement of deliberate defiance of law or contumacious conduct or dishonest intention or acting in conscious disregard of statutory obligation, in view of the High Court, was unwarranted under s. 271(1)(a). 17. Full Bench of Andhra Pradesh High Court in Addl. CIT vs., Dargapamdarinath Tuljaya Co. held that the distinction maintained between s. 271(1)(a) and s. 276C of the Act brings out the intention of Parliament in providing for two different machineries of different magnitude, where different considerations prevail. The High Court further held that a penalty imposed for tax delinquency is a civil obligation and is far different from the penalty imposed for a crime or a fine or forfeiture provide as punishment for violation of criminal or laws. In the view of the High Court, the element of mens rea need not be established before levy of penalty under s. 271(1)(a). This case also dealt with the aforesaid case of Hinsust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the element of mens rea it is generally sufficient to prove that a default in complying with the statue has occurred. There is nothing in s. 271(1)(a) which requires that mens rea must be proved before penalty can be levied under that provision." 20. In view of the position explained above the contention of the learned counsel for the assessee that the Department must show that the assessee had acted contumaciously or in defiance of law, is not correct. We have already held that the onus of explaining the reasonable cause by the assessee has not been discharged in this case. The penalties, therefore, levied by the Assessing Officer and confirmed by the first appellate authority have got to be sustained. We hold accordingly. The learned counsel for the assessee has not been able to make out a case for reduction of penalties as even according to him the total income as assessed by the Assessing Officer for all the aforesaid years has become final. 21. In the result, all the four appeals pertaining to penalty under s. 271(1)(a) are dismissed. 22. Now we come to the 4 penalties for the aforesaid year imposed under s. 271(1)(b). 23. It is an admitted position that the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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