9911796707
TMI Blog1976 (4) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... return and as such he initiated penalty proceedings under s. 271(1)(a) of the Act. 3. Pursuant to the service of the show cause notice, the assessee explained before the ITO that the returned income was below taxable limit as such assessee was not under obligation to file the return under s. 139(1) of the Act. It was further contended that assessee could not anticipate about the additions which were pertaining to cash credit and other expenses. It was also contended that the assessee has filed return under s. 139(4) of the Act and as such no penalty for default under s. 139(1) of the Act could be imposed. 4. The learned ITO was not convinced with the contention of the assessee. In his opinion, the additions were not made on account of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under s. 139(2) was served by the ITO the return was filed. In support of this contention the learned counsel for assessee relied on the ratio of decision in the case of CIT vs. Khan Brothers, 92 ITR 338. It was also explained that the assessee firm was busy in the forest business and as such the accounts could not be completed earlier and the moment they were completed the return was filed. It was also submitted that there was nothing on the record to show that the assessee in conscious disregard of its obligation failed to file the return. It was also submitted that assessee gave explanation before the authorities below but the same was not discussed in detail. It was further contended that the ITO imposed penalty for default under s. 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is settled law by now that before penalty could be imposed under s. 271(1)(a) of the Act, the entirety of circumstances must reasonable point in the conclusion that the assessee in conscious disregard of its obligation failed to file the return. The assessee maintained regular books in the ordinary course of business. According to the books, the income of the assessee was only Rs. 23,800. The assessee filed the return in the status of registered firm. The assessee also filed From No. 11 alongwith the return and the ITO officer granted registration to the assessee on 27th Dec., 1971. 13. It is common ground that in the assessment year under consideration that no tax was leviable on the registered firm upto the income of Rs. 25,000. Thu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such no return under s. 139(1) of the Act was filed in time. The conduct of the assessee has not been contumacious. There is also nothing on the record to show that assessee in conscious disregard of its obligation failed to file the return in time. We may point out that conduct of the assessee right from the very beginning to the filing of the return goes to show that the assessee has always been under the bonafide belief that it was not required to file the return under s. 139(1) of the Act. Thus we are satisfied that in the present case, it is proved that there were reasonable causes which prevented the assessee from filing the return in time. 17. Accordingly, we are of the opinion, that in the present case penalty is not called for. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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