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TMI Blog1992 (12) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... within the meaning of section 271(1)(a) of the Income-tax Act, 1961, for the year under appeal ? 2.Whether, on the facts and in the circumstances of the case, the Tribunal is justified in holding that mens rea was established on the part of the assessee ? " The brief facts of the case are that the assessee was required to file the return on or before July 31, 1974. No return was submitted and a notice was issued to the assessee under section 139(2) of the Income-tax Act, 1961, which was served on the assessee on October 15, 1974, in which the assessee was called upon to file the return on or before November 14, 1974. The return was filed on July 14, 1976. Penalty proceedings were initiated against the assessee under section 271(1)(a) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te Tribunal came to the conclusion that it was for the assessee to explain as to why the books were not completed in time and whether the assessee was prevented by sufficient cause from completing the books of account. The accountant was considered to be the agent of the assessee and it was held that since the assessee has failed to establish reasonable cause, the levy of penalty was justified. Non-completion of the books of account was held to be without any explanation and, therefore, the fact of delay in audit was held to be of no consequence. The argument of the assessee that there should be mens rea was also rejected as it was found that the notice was served on the assessee on October 11, 1974, and the return was filed on July 14, 197 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . If the law cast a duty on the assessee as in the present case for submission of the return, the assessee cannot escape the liability by merely saying that an employee of the assessee has not completed the accounts in time as it was for the assessee to manage his affairs in the manner he liked. Even after the service of notice, the returns were not submitted and, therefore, the Income-tax Appellate Tribunal was justified in coming to the conclusion that there is no reasonable cause for not submitting the return in time. Regarding question No. (2) in respect of mens rea and the proceedings under section 271(1)(a) to be established by the Revenue, the matter was examined by the apex court in Gujarat Travancore Agency v. CIT [1989] 177 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that there is a statutory obligation which has been imposed requiring the assessee to file the return within the due date, and it is for him to show a reasonble cause for filing a belated return. The burden is ultimately on the assessee to plead and prove the reasonable cause. Consequently, it was held no mens rea need be established by the Department. Reliance on the case of Hindustan Steel Ltd. v. State of Orissa [1972] 83 ITR 26 (SC) is also of no help to the assessee because that was a matter where the assessee failed to obtain the registration under the provisions of the Sales Tax Act as a dealer and, in that context, the apex court has held that the liability to pay the penalty does not arise merely on proof of default in register ..... X X X X Extracts X X X X X X X X Extracts X X X X
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