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TMI Blog1992 (9) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... e under section 274 read with section 271(1)(a) of the Act and in view of the Income-tax Officer not disputing as incorrect the reason for delay in filing the return of income being non-availability of share of profit from the firm, the Tribunal was justified in law in holding that it was not proved that the accounts of the firms in which the assessee was a partner were non-finalised and that it was not proved that the assessee did not know the share income from the said firms before the due date of filing of the return ?" The return of income for the assessment year 1967-68 was required to be filed on or before August 15, 1967, while the same for the assessment year 1968-69 was required to be filed on or before June 30, 1968. The assessee, however, failed to file the returns within the prescribed time and, therefore, the Income-tax Officer issued notices for the above said years under section 148 of the Income-tax Act, 1961, and they were duly served upon the assessee on September 17, 1970. The assessee, however, filed the returns of income for both the above said years on March 31, 1971. As the returns were not filed within the prescribed time, the Income-tax Officer called upo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and that, in the past also, the assessee had filed the returns of income for the assessment years 1963-64, 1965-66 and 1966-67, late and that the assessee on that count had also suffered penalties for not filing returns in time for the assessment years 1965-66 and 1966-67. The Tribunal had concluded that the assessee had failed to furnish the returns within time without a reasonable cause. The Tribunal had examined the plea of the assessee that the abovesaid partnership firms from which the assessee derived share income were late in filing their returns. Anyhow, the Tribunal had taken the view that merely because the firms in which the assessee was a partner had not made up their accounts was not per se a reasonable cause for not filing the returns within the prescribed time. In the result, therefore, it was held by the Tribunal that no reasonable cause was established for the delay in filing the returns for the abovesaid two years under consideration. In view of the abovesaid conclusion, the appeals filed by the assessee came to be dismissed by the Tribunal by orders dated February 19, 1977. As noticed above, ultimately, in compliance with this court's order dated July 31, 1978, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turns in time. The said explanation is in the form of a letter dated March 25, 1974, addressed to the Income-tax Officer, saying that the assessee has no income except his share from the two firms as indicated earlier, and that, as he did not get his share of profits, he could not file his return of income within the prescribed time. It is further stated that, for the very same reason, he could not file an estimate of his total income and also could not pay the advance tax in time. Ultimately, it is submitted that he was prevented by a reasonable cause from filing returns of income along with the estimate of the total income within time. Mr. Divatia, while placing heavy reliance upon the abovesaid letter, has urged that the assessee had urged before the Incometax Officer that he was prevented by reasonable cause from filing the returns during the stipulated statutory limit, But, it requires to be appreciated that what the assessee has said in the abovesaid letter is that, as he did not get his share of profit, he could not file the return of income within the prescribed time limit. It shall have to be pertinently appreciated that, excepting the abovesaid broad statement, the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven before the Tribunal, the contention urged on behalf of the assessee was limited to the extent of saying that the assessee could not file his returns because he did not get his share of profit from the partnership firms. Precisely, therefore, the Tribunal has come to the conclusion that the abovesaid contention which can be said to be a factual contention would not constitute a reasonable cause for filing the returns late. It appears that, on the facts and circumstances o the case, no other view is possible. We are, therefore, inclined to say that the view taken by the Tribunal in this respect is a justifiable one. The contention raised by the assessee through the learned advocate, Mr. Divatia, proceeds on the footing that, if the assessee was a partner in two firms as indicated above, and if his income was the income from the share of the abovesaid partnership business only, then his not getting his share from the partnership business itself would constitute a ground for coming to the conclusion that there was a sufficient cause for not submitting the return in time. The abovesaid contention raised by Mr. Divatia can be conveniently divided into two limbs. The first limb of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision in our view goes only up to the extent of saying that it would be a relevant consideration. Anyhow, the abovesaid relevant consideration shall have to be taken into consideration along with the facts and circumstances of each case. According to us, the same would be the position emerging out of one unreported decision of this court on which Mr. Divatia has placed reliance, namely, ITR No. 156 of 1974 decided on 28/19-1-1976. The Bench of the court speaking through P. D. Desai J., while narrating the facts, has stated that, in that case, the assessee was carrying on business as sole proprietor at a village Vansjalia under Jamnagar District. The assessee was also a partner in three other firms which carried on business at Porbundar. The question which was referred to this court in the aforementioned decision is almost identical and similar. Though, on the facts and circumstances of the case, it was held that the assessee was prevented from filing his return late because of a reasonable cause, the observations made by the Division Bench would not assist Mr. Divatia in making out a case while urging before us that the abovesaid factor would be a conclusive and decisive factor. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was sufficient cause for not filing the return in time and it was pointed out that the abovesaid question is essentially a question of fact and not one of law. This decision also, therefore, does not proceed further to lay down that the abovesaid aspect as urged by Mr. Divatia would be the only relevant consideration, and, therefore, should be accepted as a decisive factor. One more decision of the Mysore High Court in N. Seenappa v. ITO [1974] 97 ITR 528 also, in our view, would not support the contention raised by Mr. Divatia before us. It was a question in respect of the interest levied by the Income-tax Officer while exercising his powers under section 139(1), (4) of the Income-tax Act, 1961. The facts and the question therein being entirely different, in our view, the abovesaid Mysore High Court decision will not render any assistance to Mr. Divatia while urging the aforementioned contention before us. The Orissa High Court decision in CIT.v Baijnath Chopolia [1976] 102 ITR 551, has been decided on the facts of that case. It is indeed true that the delay was caused because the assessee's only income was the share of profit from the firm and that the firm could not finalise it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect that he had not got his share of profit from the partnership business income and, that, therefore, he has not filed his return in time. Excepting the abovesaid, the assessee has not said a word further. The Tribunal has rightly noticed that the above was the only explanation which the assessee had assigned. According to the Tribunal, there was no evidence on record to show that the books of account of the firm were not ready or that the assessee's share income from the firm was not worked out in time. Looking to these facts, it shall have to be accepted on the basis of the principle laid down by this court in an unreported decision in ITR No. 156 of 1974 that though the abovesaid contention would be a relevant consideration, only on the basis of the same it cannot be accepted that it would constitute a sufficient cause for not filing the return in time. Looking to what has been stated by us earlier, questions Nos. 1, 3 and 4 shall have to be decided and answered in the affirmative, against the assessee and in favour of the Revenue. So far as question No. 2 referred to us is concerned, it requires to be pointed that it relates to the question regarding the initial burden on ..... 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