9911796707
TMI Blog1997 (1) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri S. Rangarajan, father and guardian of the assessee, filed a reply on March 21, 1977, stating that as the auditors, Gowrikanth and Co., who were looking after the assessee's income-tax matters took considerable time to return the file and hence the delay in complying with the statutory provisions. The assessee as the guardian of the minor should have taken steps to file the return in time. The reason advanced is not satisfactory. " The Income-tax Officer imposed penalty for the year 1972-73 Rs. 29,542, for the year 1973-74 Rs. 6,672 and for the year 1974-75 Rs. 5,028. On appeal, the Appellate Assistant Commissioner found that the total income of the three years were made up of the following items : --------------------------------------------------------------------------------------------------------------------------------------------------- Items Assessment years --------------------------------------------------------------------- 1972-73 1973-74 1974-75 (Rs.) (Rs.) (Rs.) --------------------------------------------------------------------------------------------------------------------------------------------------- Capital gains on sale of land 90,000 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... minor, there could be no penalty under section 271(1)(a). It was further held that since the minor cannot be penalised and since section 162 refers to only reimbursement of the taxes paid by the representative guardian, the guardian may not be liable to pay penalty as a representative for the minor. It was further found that the penalty was imposed without affording a reasonable opportunity in respect of independent liability. In that view, the penalties were cancelled. Learned Central Government standing counsel appearing for the Department submitted that it is not in dispute that the penalty under section 271(1)(a) cannot be levied on a minor, since the obligation to file the returns for the minor's income is on the guardian, that the penalty can be levied against the guardian when he failed to discharge his obligation and that it is not correct to state that since in the cause title, the name of the minor was shown as the assessee, the penalties were imposed on the minor. It is further submitted that a plain reading of the order of the Income-tax Officer would go to show that the penalty was levied on the father of the minor for not filing the return in time, that it cannot b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the Department as well as learned counsel for the assessee. The fact remains that for the assessment years 1972-73, 1973-74 and 1974-75, the returns were filed by one S. Rangarajan, who is the father of the guardian of the minor son, R. Srinivasan, on February 17, 1975, even though the same ought to have been filed on or before 30th June of each assessment year. Since there was delay in filing the returns, penalty proceedings were initiated by the Income-tax Officer and penalties levied by him under section 271(1)(a) of the Act which were confirmed by the Appellate Assistant Commissioner. However, the Tribunal cancelled the penalties. The Tribunal agreed that the father of the minor is liable to file the returns of the minor and that there was delay in filing the same. The Tribunal found that there was no reasonable cause for not filing the returns and that the delay was due to the negligence on the part of the father of the minor and for the delay penalty under section 271(1)(a) is imposable. But, according to the Tribunal, the penalties imposed are unsustainable for two reasons, namely, (1) in the order levying penalties, the minor was shown as the assessee and, therefore, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dvantage of and read in order to attribute a separate meaning for that. A plain reading of the order imposing penalty would go to show that the penalties were levied on the father of the minor and not on the minor. Therefore, the Tribunal was not correct in stating that the penalties were levied on the minor and there was confusion in the order as to on whom the penalties should be levied. Further, according to the Tribunal, penalty cannot be levied against a minor and, therefore, the negligence on the part of the guardian of the minor would be a reasonable cause for the delay if it is taken to have been that of the minor. This view of the Tribunal also cannot be accepted as correct. It is no doubt true that the guardian of the minor who paid the tax on behalf of the minor is entitled to recover the same from the estate of the minor. Section 162 of the Act says that any sum paid by the guardian on behalf of the minor is recoverable by the guardian from the minor's estate, but that would not include the penalty paid by the guardian for the default committed by him. Even assuming that the guardian is not entitled to recover the penalty paid under section 271(1)(a) of the Act from t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
