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TMI Blog1989 (6) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... on 139(2) of the Income-tax Act, 1961 ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal misdirected itself in law in cancelling the order of penalty made by the Income-tax Officer under section 271(1)(a) of the Income-tax Act, 1961 ? " Shortly stated, the facts are that for the year under reference, the assessee was required to file its return of income on or before May 18, 1963, in terms of the notice issued under section 139(2) of the Act served on the assessee on April 18, 1963. The return was, however, actually filed on December 19, 1966. Therefore, there was a delay of 43 months in filing the return of income. The Income-tax Officer initiated proceedings under section 271(1)(a) of the 1961 Act and in reply t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved that the disputes amongst the partners were real and not imaginary and were the subject-matter of protracted litigation which was at the material time still pending in the court. The Tribunal also accepted the assessee's submission that the assessee initially did not want to file an incomplete return and did so later on only under compelling circumstances that matters could not indefinitely be delayed. We are of the view that the Tribunal was not right in holding that in proceedings under section 271(1)(a), the Department has to prove that there was conscious disregard on the part of the assessee of the legal obligation imposed by the statute or that there was any contumacious or dishonest conduct on the part of the assessee. Reliance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iling the return. Merely because there was a dispute amongst the partners or the Income-tax Department had seized the books of account could not be a ground for such inordinate delay. It has not been suggested that the assessee could not get hold of the books of account and papers from the Income-tax Department for the purpose of preparing the accounts. Ultimately, the assessee filed an incomplete return. There is no material or record to hold that the assessee was prevented by reasonable cause from filing the return in time. We are, therefore, of the view that the Tribunal was not justified in cancelling the penalty. For the reasons aforesaid we answer both the questions in this reference in the affirmative and in favour of the Revenue. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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