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TMI Blog1976 (1) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment proceedings was of the opinion that there was default in filing the return within time under s. 139(2) as such he initiated penalty proceedings under s. 271(1)(a). 3. The ITO issued show cause notice to the assessee under s. 274 r/w s. 271(1)(a) of the Act. According to the ITO inspite of property service nobody appeared on the date of hearing. Thus the learned ITO was of the view hat the assessee failed without reasonable cause to furnish the return within time as required under s. 139(2). Consequently, he imposed a penalty of Rs. 4,508 for default of 26 months. 4. Before the learned AAC in appeal it was argued that there were reasonable causes which prevented the assessee from filing the return in time. The learned AAC permitted the assessee to agitate this point before him. The assessee also contended that he had already filed the return on 30th Aug., 1969 whereas it was due under s. 139(1) on 30th June, 1969. The learned AAC was of the view that there is no proof of filing the return in August, 1969 as such this contention of the assessee was not accepted. On behalf of the assessee it was also contended that late Seth Sobhagmal Lodha had been sick and ultimately he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contention on the ground that no evidence was produced by the assessee. The learned AAC did not consider and discuss the evidence which was produced by the assessee is assessment proceedings. We have seen the original return filed by the assessee. On it the word "Duplicate" was mentioned. In the statements given by the assessee along with the return it is also stated that the return was duplicate one and the original return was filed on 30th Aug., 1969. There is also typed copy of the profit and loss account which was filed alongwith the return. It was typed on 25th Aug., 1969. The learned AAC did not discuss this evidence independently in penalty proceedings. As a matter of fact, the learned AAC while deciding appeals against the order of the ITO under s. 271(1)(a), was required under the law to consider the explanation of the assessee if given in penalty proceedings independently from the assessment proceedings. In support of this conclusion we are fortified by the ratio of decision in the case of R. Sreenivasan & Co. vs. CIT Madras (1974) 97 ITR 431. In view of the aforesaid facts it is clear that on the original return the word "duplicate" is mentioned. There is no finding of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and having been served on 6th June, 1969 and the assessee was required to file the return uptil 5th July, 1969. The inordinate delay of 26 months for filing the return was evidence without any reasonable cases and the only explanation put for by the assessee being that the assessee was sick the expired in Jan., 1969 does not have any force of conviction because this is the case of HUF and the Karta of the HUF had expired and it cannot be said that the assessee had expired because the assessee in this case is HUF and HUF never dies. Even the death of the Karta of the HUF took place in January, 1969, i.e., about 7 months before the due date of filing the return. In view of all these facts the ITO was fully justified in resorting to the penalty proceedings under s. 271(1)(a)." From the aforesaid finding of the learned AAC it is clear that he did not say that the Karta was not ill. He also did not say a word that the successor did not take much time in completing the accounts. Thus the explanation given by the assessee was not considered to be false by the learned AAC. The learned AAC, on the other hand, held that the explanation given by the assessee was not reasonable. So it is to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee took clear case that the successor after the death of Shri Sobhagmal Lodha, the Karta of the HUF, took much time in completing the account. This explanation was not found to be false. Under, these circumstances, if we consider the aforesaid facts, circumstances and probability of the case, in our opinion, the explanation given by the assessee was quite reasonable and probable in the circumstances of the case. At least the entire course of conduct and events as discussed above do not go to suggest that the assessee in conscious disregard of his obligation failed to file the return in time. It is settled law by now that the order imposing a penalty for failure to carry out a statutory obligation is the result of a quasicriminal proceedings, and penalty will not ordinarily be imposed unless the party obliged, either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of his obligation. We do not think that the imposition of the penalty is warranted for mere failure for furnishing the return within time, in the absence of any proof that the assessee acted deliberately in defiance of law or was guilty of con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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