9911796707
TMI Blog1981 (8) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... for the assessment year 1970-71. The return, however, was filed on the 28th October, 1970. It was claimed before the ITO that the assessee had applied in Form No. 6 but no evidence could be produced in support of this claim. In the absence of any explanation, the ITO imposed a penalty of Rs. 10,386 under s. 271(1)(a) of the I.T. Act, 1961. The ITO, as mentioned hereinbefore, did not take into consideration the application filed in Form No. 6, which was filed by the assessee, after the time for filing of the return had expired.. The ITO proceeded to say that no evidence was produced by the assessee. The ITO did not say that he looked into the records and found that such an application was not filed. The ITO thereafter went on to observe tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the firm. It was in these circumstances that an application in Form No. 6 had been filed. It was pointed out that the ITO had not at all considered the contentions of the assessee made in Form No. 6 and in that view of the matter, it was contended by the assessee, that the order was bad in law and could not be upheld. The satisfaction for the imposition of penalty was with the ITO and he could not be so satisfied without looking into the reasons advanced by the assessee. The Tribunal found that the application in Form No. 6 was filed after the due date had already passed and, therefore, the ITO was not under any obligation to take into consideration that application particularly when there was no prima facie valid ground mentioned in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that the filing of the return had been delayed due to the delay in final adjustment of the accounts for the year concerned, by reason of the accountant's ill-health and that I had applied for an extension of time till 31st March, 1971. The Income-tax Officer did not ask me to produce the evidence for filing the application in Form No. 6. I, therefore, had no occasion to produce the receipt for filing the said Form 6 which I had been carrying with me in the file." The question is, whether the Tribunal was right in upholding the order of penalty. On behalf of the assessee, it was contended that Form No. 6 itself indicated that the application could be filed after the expiry of the time for the filing of the return. Form No. 6 provides a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave taken into consideration this application explaining the delay. The Full Bench of the Orissa High Court in the case of CIT v. Gangaram Chapolia [1976] 103 ITR 613 held that the taxing authorities must be satisfied that the failure to furnish the return in time was without reasonable cause. The burden of proof of reasonable cause under s. 271(1) was on the assessee as the matter was within his special knowledge. This burden could be discharged by a preponderance of probabilities as in a civil case and not necessarily by proof beyond reasonable doubt. We are in agreement with the view expressed by the Orissa High Court. There the Full Bench of the Orissa High Court observed, inter alia, as follows (p. 618): " Language of the section is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t a reasonable cause, was not correct. The mere use of the expression " without reasonable cause " could not import a mental element of mens rea. Before the imposition of a penalty under s. 271, what was required was that the officer must be satisfied, not arbitrarily but judicially, that any person has without any reasonable cause failed to furnish the return or has concealed the particulars of his income. The fulfilment of the condition required is that there must be an absence of a reasonable cause and this fact has to be objectively found by the assessing authorities in the light of the explanation offered by the assessee. On behalf of the Revenue, however, our attention was drawn to the decision in the case of Assam Frontier Veneer and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether there was a good explanation or reasonable cause or not. Learned advocate for the Revenue further contended that the Tribunal has held that there was no reasonable cause and this was a finding of fact. In support of this contention, he has referred first to the decision of the Delhi High Court in the case of Shiv Shankar Lai v. CGT [1974] 94 ITR 269. Here, the first question is whether the satisfaction must primarily be, for an imposition of penalty, with the ITO. The second aspect which is important is whether Form No. 6 stipulated that the explanation should be taken into consideration. These two aspects were not present before the Delhi High Court. If a finding is arrived at by a wrong reading of the section, that is to say, fro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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