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TMI Blog1983 (5) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... uly empowered. It should also be noted that the said Shri Prosad did not ask for any opportunity to file power at the subsequent date when the matter was heard. It was the case of the petitioner that for the assessment year 1965-66 he did not file any voluntary return under s. 139(1) of the said Act as it suffered loss and on 31st March, 1967, the petitioner filed a return showing such loss at Rs. 2,808 in pursuance of a notice, dated 25th January, 1967, issued under s. 148 of the said Act. It was also the case of the petitioner that the ITO, Central Circle XXII, completed the assessment for the year in question on 24th March, 1971, under s. 143(3)/148 of the said Act, and determined the total income at Rs. 27,029. The petitioner has stated that in computing such total income, the officer concerned estimated the annual value of the building at Rs. 28,880 at the rate of rental income of Rs. 2,400 per month. In that view (the annual value) of the main building and the outhouse together came to Rs. 34,080 and after statutory deduction the income from such property was determined at Rs. 26,836 and such determinations for the year in question was made on a notional basis. It has als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omputed the total income at Rs. 25,030 and Rs. 23,080 for the respective assessment years. It has been stated that in making such assessments, the ITO concerned adopted the fair rent at Rs. 0.40 per sq. feet and, therefore, the rent per month of the main building was increased to Rs. 2,200 per month. From such orders of assessment, appeals before the AAC, challenging the legality and validity of the determination of annual value of the premises in question, viz., No. 3, Lord Sinha Road, Calcutta, were preferred and the said officer by consolidated order, dated October 30, 1974, disposed of the appeals for the assessment years 1965-66 and 1967-68, along with the other appeals for the assessment years 1966-67 and 1968-69 to 1971-72. It has also been stated that in the said appeals it has been held by the AAC concerned that as per settlement arrived at with the Commissioner, the ITO should adopt Rs. 10,560 as the annual letting value of the property in question and in that view of the matter, the petitioner has stated that its total income was reduced to Rs. 7,430 and Rs. 6,750 for the assessment years 1965-66 and 1967-68, respectively. It was the case of the petitioner that from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that in making the determinations as mentioned above, the Commissioner, respondent No. 1, did not act judicially but he has acted arbitrarily in confirming the orders of penalty for the concerned assessment years. It has also been stated that penalty proceedings being quasi-criminal in nature, the burden lay upon the Revenue to prove that he was obliged to file the return or had acted in deliberate defiance of law or was guilty of any dishonest conduct and acted in conscious disregard of the necessary obligation. It has also been stated that the said Commissioner further failed to exercise his discretion judicially to the effect whether penalty should be imposed for failure to perform statutory obligation and did not take into consideration all the relevant facts of the case, i.e., the breach, if any, was due to bona fide belief that the petitioner was not liable to file any statutory return under the said Act. It has also been stated that the said Commissioner has further failed to take into consideration that at the time when the petitioner was required to file voluntary return, no assessments were made against them and, therefore, they were to be guided by what they believe to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e shirking (his) obligations. It has been categorically claimed that the authorities concerned or the authorities below failed to apply their minds to the principles as mentioned hereinbefore and, as such, they and each of them committed gross error of law and jurisdiction for which the orders, as made, must be set aside and quashed. It has been categorically claimed that the respondent, Commissioner, misdirected himself in holding that the filing of a return Was a statutory obligation under the said Act in spite of the fact that the petitioner suffered losses in the assessment years in question and he erred in holding that the provisions of s. 271(1)(a) of the said Act were clearly attracted in the facts and circumstances of the present case. Since there was no opposition filed to this proceeding and that too in the circumstances as recorded hereinbefore, I shall have to deal with the submissions as made for and on behalf of the petitioner by Mr. Ganguly. It was firstly claimed by him that since the assessments in question were the first assessments of the petitioner, the onus in the instant case was on the ITO concerned or the Revenue to establish that no reasonable cause for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntumacious conduct or dishonest or persistent disregard of the statutory obligation. The levy of penalty under s. 271(1)(a) is not a mere concomitant of a delay in filing the return. If Parliament intended that this was the position, then it would have omitted the expression " without reasonable cause " in the substantive part of s. 271(1)(a) and would have provided for the assessee to get out of the operation of the provision by establishing reasonable cause as has been provided in s. 146. The rigour of the principle applicable to criminal prosecution will not apply to proceedings under s. 271(1)(a) so that even in a case where the assessee fails to extend co-operation and withholds any explanation for the delay in filing the return, he is not liable to be penalised unless the Department established that he had acted in deliberate disregard of his statutory obligations. Where a person has no explanation to offer, it may be treated as circumstantial evidence to show that he had acted without reasonable cause. Also in a case where the explanation is so prima facie unreasonable, it would be open to the ITO to levy penalty on the ground that the assessee had no reasonable cause for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs being without any or due reasons are liable to be set aside on the due interference by this court. In support of such submissions he referred to the observations in the case of Siemens Engineering and Manufacturing Co. of India Ltd. v. Union of India, AIR 1976 SC 1785, where it has been laid down that it is now settled law that where an authority makes an order in exercise of quasi-judicial function, it must record its reasons in support of the order it makes. Every quasi-judicial order must be supported by reasons. It has also been observed in that case that the rule requiring reasons to be given in support of an order is like the principles of audi alteram partem, a basic principle of natural justice which must inform every quasi-judicial process and this rule must be observed in its proper spirit and the mere pretence of compliance with it would not specify the requirements of law. In this, after referring to the order by the respondent, Commissioner, Mr. Ganguly claimed that he has not, in fact, dealt with or decided the case on its merits or its true perspective and has not, in fact, dealt with the reasons as given by his subordinate Tribunal and the submissions which were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee to file a return of the total income of any other person in respect of which he is assessable under the said Act. The section further fixes a date by which returns should be filed, with corresponding provision to have the date of filing the return extended up to a certain period without charging any interest and beyond that period, on payment of interest. The section does not allow a belated return to be filed after the expiry of the specified number of years from the end of the relevant assessment year. In terms of the requirements of s. 139 and more particularly under sub-ss. (1) and (2) thereunder, every person is thus bound to furnish voluntarily, a return of his total income or the total income of any other person in respect of which he is assessable, if such income during the previous year exceeded the maximum amount which is not chargeable to income-tax. The ITO may in any case serve a notice on an assessee or a representative assessee, whose total income, in his opinion, renders him liable to pay tax, requiring him to furnish within thirty days, such return and such notice may be issued at any time in the course of the assessment year. If such a notice is not issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igation of every person whose total income exceeds the maximum amount which is not chargeable to tax, to make a return in the prescribed form, verified in the prescribed manner and also to furnish all the prescribed particulars and failure to make such a return, without reasonable and just cause, entails liability to penalty under s. 271(1)(a) of the said Act. The only ground that was urged in support of the non-filing of the return all throughout was loss and nothing else and not the fact of the knowledge of liability to file return, as has been sought to be urged now, here, in these proceedings for the first time. Mr. Ganguly contended that such paucity or shallowness of knowledge being a reasonable ground and which would certainly come within the exceptions, as included in s. 139 of the said Act, so on due interpretation of the words " reasonable cause " as used in s. 271(1)(a) of the said Act, the authorities below should have taken such fact into consideration. Mr. Ganguly could not, of course, contend that such defence as indicated above and which incidentally was his only submission now, was not pleaded before any of the authorities below or at any time, but as mentioned e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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