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TMI Blog1983 (4) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... 13th Feb, 1979. The income returned by the assessee was Rs. 35,000, but the assessment resulted in a total income being determined at Rs. 1,01,840, on which tax of Rs. 11,486 was demanded. The ITO after issuing a show cause notice proposing levy of penalty for the delay in filing the return and rejecting the explanation of the assessee imposed a penalty of Rs. 15,948 calculating the period of delay as 13 months. In the appeal preferred by the assessee the CIT(A) considered that the circumstances pleaded by the assessee for the default in filing the return in time constituted reasonable cause and therefore held that the penalty is not eligible. He accordingly cancelled the penalty. Aggrieved by his order, the department is in appeal. 2. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levy of penalty. In this connection he stated that the original notice to show cause proposing levy of penalty was issued on 22nd Mar, 1980 by the then ITO, Shri K.P. Srinivas, fixing the hearing on 20th Apr, 1980. The assessee had submitted a detailed explanation in response thereto in writing, but after more than a year and a half the subsequent incumbent to the office, Shri T.VS. Unnikrishnan had imposed the penalty on 7th Jan, 1982 without any fresh hearing as required u/s 129(1) of the IT Act. In this connection he also referred to and relied on the decision of the Andhra Pradesh High Court in Anantha Naganna Chetty vs. CIT (1970) 78 ITR 743 (AP) and the Madras High Court decision in S. Loonkaran and Sons vs. CIT (1977) 108 ITR 92 (Mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, the ITO is not justified in rejecting the assessee s difficulty in this connection merely on the ground that previously the business was carried on as a proprietary concern. What is more, the ITO has summarily rejected the plea of the assessee that Mr. Velayutam, senior partner, was mentally upset and financially broke which had completely disturbed his proper frame of mind to ensure that the accounts of the firm are finalised early, on the ground that it had nothing to do with the preparation of accounts and filing of the return. In the recent decision of the Madras High Court in Southern Publications Pvt. Ltd. vs. CIT (1982) 31 CTR (Mad) 26 : (1982) 137 ITR 822 (Mad), the principles governing the imposition of penalty for default ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nable cause for his default; the onus on the contrary is on the Officer to show that the assessee s default was without reasonable cause and there is quite a difference between the two. The decision in (1978) 108 ITR 192 (Mad) relied on by the assessee also, according to us, lends support to the assessee s case. The other argument advanced by the ld. counsel with regard to the lack of opportunity was only a supporting argument and it also has force, but it is not necessary for us to base our decision on that argument or the acceptance thereof because on the merits of the case, we are satisfied that the CIT(A) s order upholding the explanation of the assessee as reasonable cause is correct and justified. The department s objection is rejecte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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