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TMI Blog1981 (11) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of time, but that request for extension had been refused by the ITO. In the penalty proceedings, the ITO referred to the fact that the assessee's application for extension of time for filing the return has been rejected, and proceeded to hold that there was no reasonable cause for the delay in the submission of the return beyond the time appointed under the Act. On appeal, the AAC went in some detail into the explanation offered by the assessee for the delay. The assessee had submitted before him that during the year in question, assessee's concern was beset with strikes. It was further submitted that the directors of the company were pre-occupied with urgent administrative matters and also with the preparation of the accounts for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re citation of the case law in Hindustan Steel Ltd. v. State of Orissa [1972] 83 ITR 26 (SC), the Tribunal cannot seek to annul a penalty without at the same time, going into the merits of the case. We do not say that the criticism of the learned counsel is entirely uncalled for. But we cannot accept the suggestion that the Tribunal had cancelled the penalty in this case capriciously or even for some wrong reason. As we had earlier mentioned, they had quoted the law from the decision of the Supreme Court in Hindustan Steel Ltd. v. State of Orissa [1972] 83 ITR 26. That was a case which arose under the Orissa Sales Sales Tax Act, 1947. The observations of the Supreme Court in that case, however, were considered by a Bench of this court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, then it would have omitted the expression 'without reasonable cause' in the substantive part of section 271(1)(a) and would have provided for the assessee to get out of the operation of this provision by establishing reasonable cause, as has been provided in section 146. The rigour of the principle applicable to the criminal prosecution will not apply to the proceedings under section 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. We do not share the view that commended itself to the Orissa High Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITO with jurisdiction to levy penalty on the ground that the delayed submission of the returns must be without reasonable cause. The rejection of the application for extension of time for filing the return is one thing. The finding that the delay in the filing of the return was without reasonable cause is quite another thing. The ITO was not, therefore, justified in holding that the penalty was leviable merely on the score that he had earlier refused to grant extension of time for filing the return. The AAC's order sustaining the penalty also does not seem to us to be based on any valid reason or justification. He had overlooked the statutory imperative that the filing of the returns in a delayed fashion must be without reasonable cause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee had not offered any explanation at all before the Income-tax Officer for the delay ? 2. Whether, on the facts and in the circumstances of the case, and having regard to the provisions of section 271(1)(a) the conclusion of the Appellate Tribunal is based on relevant evidence and is a reasonable view ? " The first question contains a misstatement in so far as it implies that the assessee had not offered any explanation whatever for the delay in the filing of the return. It may be mentioned that the assessee did file letter in explanation before the ITO in the course of the assessment proceedings. But this explanatory letter was ignored by the ITO. Although it was considered by the AAC. The Tribunal apparently did not consider e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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