9911796707
TMI Blog1983 (3) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... wo years were due respectively on 30th June 1976 and 30th June 1977. Shri Trimal added that on the assessee s application separately for each of the two years seeking time to file the returns upto 30th September of each year, the ITO granted time sought for. Thus 1976-77 return was due on 30th September 1976 and that for the asst. yr. 1977-78 on 30th September 1977, Shri Trimal added that thereafter the assessee did not seek any further extension for filing the return. Whereas the return for the year 1976-77 was filed on 30th September 1977, that for the year 1977-78 was filed on 20th September 1978. Shri Trimal submitted that as such the return for the first year was filed 12 months late and that for the second year 11 months late. As rega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y a part-time accountant who had after the close of the accounting year left the assessee s services. Shri Trimal stated that the ITO was not prepared to accept this averment. As such the ITO examined the assessee s explanation critically. The ITO found that for the first accounting year the turnover was Rs. 11.6 lacs and for second year the turnover was Rs. 13.9 lacs. With a turnover of this magnitude, the ITO prima facie, considered as unreasonable the assessee s submission that the assessee s accounts were maintained by a part-time accountant. Shri Trimal added that the ITO noticed that in one year itself the assessee had made a salary payment of Rs. 15,458.82 and in the words of the ITO vide para 2 of his order, which is virtually a com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... late submission of the return was false. Shri Trimal added that as such the ITO levied the penalty as prescribed and the penalty so levied for the two years 1976-77 and 1977-78 respectively was Rs. 4,344 and Rs. 6,492. 4. On appeal to the AAC, Shri Trimal pointed out that the assessee s representative before the AAC filed written submission to which the AAC has made more than a passing reference. Shri Trimal pointed out that the assessee s representative before the AAC fairly and properly accepted that "the conclusions drawn by the ld. ITO are quite fair and reasonable. However, it is a fact that the assessee firm did have a full time accountant" and similarly in the subsequent paragraph, the AAC noted: "the arguments put forth by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ITO for both the years are cancelled." Shri Trimal urges that the AAC s order containing no facts is as such bad and therefore deserves to be cancelled. Accordingly Shri Trimal submits that the ITO s order be restored. 6. Shri M.R. Bhagwat, the ld. Chartered accountant, submits that the assessee carries on business as a firm and that it is not true that the assessee is a corporation. It is pointed out that the business is carried on in a traditional manner. As such it is urged that there is no well-defined allocation of work. It is submitted that what the assessee intended to convey the ITO in terms of the explanation dt. 16th June 1980 was that the assessee s accountant had multifarious duties and that as a result he was looking part-t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required by law. Considering the assessee s business and the number of partners who are four, it cannot be stated that the assessee s business was so small that a part time accountant could write the accounts so as to enable the assessee to make its commitments on filing estimates, returns and make the tax payments on time. We further find that the AAC merely accepted the averments made before him. We have to record that the assessee s representative failed to substantiate any of the averments made before the AAC. We find that in present case the ITO has disproved the assessee s explanation. In the circumstances, we hold that the AAC s order dt. 14th September, 1981 cancelling the two penalties levied by the ITO is erroneous on facts and t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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