9911796707
TMI Blog1992 (9) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Income-tax Act, 1961, means total income as disclosed in the returns filed by the assessee or the total amount of income as finally computed in the manner laid down in this Act, as defined in section 2(45) of the Income-tax Act, 1961? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in holding that the penalty order under section 271(1)(a) was barred by limitation and the amendment brought about in section 275 by Act No. 42 of 1970 was not applicable in this case, even though the penalty proceedings were pending before the Income-tax Officer when the amendment came into force with effect from April 1, 1971 ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t its total income was below the maximum amount not chargeable to tax in the case of a registered firm and thus there was no legal obligation to file the return of its income, and (2) that the order imposing penalty was barred by limitation inasmuch as it was made after the expiry of two years from the completion of the proceedings, in the course of which the proceedings for imposition of penalty were initiated. Both these grounds found favour with the Income-tax Appellate Tribunal resulting in the deletion of the amount of penalty. On behalf of the Revenue, it was contended that the belief entertained by the assessee, viz., that it had no taxable income, was misconceived for the assessment was completed on a taxable income of Rs. 88,055. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed time, does not furnish it or submits it beyond the prescribed period, without reasonable cause, he can be subjected to penal action contemplated under section 271(1)(a) of the Act. The next question is as to which income is contemplated in section 139(1) of the Act when it speaks of voluntary furnishing of the return where the income of a person during the relevant previous year exceeds the maximum amount not chargeable to tax, i.e., the income which the assessee believed to be his income or that which is finally assessed by the tax authorities. A problem identical to that with which we are confronted, was the subject-matter of discussion before a Division Bench of this court in CIT v. N. Khan and Brothers [1973] 92 ITR 338. It was r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it could not file its return in time as it laboured under a bona fide belief that its income in the previous year relevant to the assessment year in question did not exceed the maximum amount not chargeable to tax. There is no whisper in any of the orders passed by the tax authorities including that of the Tribunal that, in submitting the return of Rs. 25,893, the assessee had indulged in concealing its true income or the act of filing the return on an income of Rs. 25,893 was not a bona fide action. Mere non-furnishing or delayed furnishing of the return of income does not ipso facto attract penalty under clause (a) of section 271(1) of the Act unless such failure was without sufficient cause. Penalty under section 271(1)(a) of the Act for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e total income does not exceed the maximum amount not chargeable to tax in his case by Rs. 1,500. That section has no application to the facts of the instant case for it applies to a case where there is complete failure to furnish the return in accordance with the provisions of section 139(1) of the Act. That section is not attracted to a case where a belated return is furnished. All that section provides is that in a case where the maximum total income chargeable to tax does not exceed by Rs. 1,500, no penalty under section 271(1) of the Act shall be imposed. It is not in dispute that income up to Rs. 25,000 in the relevant assessment year was not taxable in the case of a registered firm and in terms of section 271(3)(a) of the Act, no pen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court as have been raised before the Tribunal and have been referred by it. Since the controversy involved in question No. 1 was not canvassed before the Tribunal and the question does not arise out of the Tribunal's order, it is returned unanswered. Question No. 2, in our opinion, also deserved to be returned unanswered in view of our answer to question No. 3. For all practical purposes, question No. 2 has become academic and redundant, inasmuch as, even if we were to answer this question in the negative, it would not advance the case of the Revenue as cancellation of the impugned penalty has been upheld in returning the answer to question No. 3. We, accordingly, return question No. 2 also unanswered. There shall be no order as to costs. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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