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TMI Blog1977 (2) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... stified in cancelling the penalty of Rs. 6,090 imposed by the ITO u/s. 271(1)(a)? " The respondent-assessee, M/s. Rawat Singh and Sons, jodhpur, were required to file the return of their total income for the assessment year 1965-66, by September 30, 1965. They made an application for extension of time and were allowed to file the return by November 15, 1965. The return was, however, filed on December 21, 1965, showing a total income of Rs. 12,000 on estimated basis. The return was considered invalid as it was not accompanied by a copy of the profit and loss account, trading accounts, and balance-sheet. This fact was communicated to the assessee by the ITO on January 4, 1966. Thereafter, the assesse furnished a return on May 19, 1966, decla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the view that in the absence of a negative reply turning down the assessee's request for extension, the assessee was entitled to act reasonably on the assumption that the request for extension of time had been granted. Against this order, the ITO preferred an appeal to the Income-tax Appellate Tribunal. The Tribunal stated that the assessee, vide its application dated March 28, 1966, sought time up to April 30, 1966, for filing the fresh return of income and did the needful on May 19, 1966. The Tribunal dismissed the appeal as they were unable to hold that the assessee " deliberately acted in defiance of law " or that its conduct was " contumacious or dishonest" so as to justify the levy of penalty. This order of the Tribunal is dated 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal had also relied upon a decision of the Supreme Court in Hindustan Steel Ltd. v. State of Orissa [1972] 83 ITR 26 ; [1970] 25 STC 211. It is urged that the said Supreme Court decision relates to a penalty under a sales tax legislation, while the aforesaid Kerala decision has been overruled by a Full Bench of the same High Court in ClT v. Gujarat Travancore Agency [1976] 103 ITR 149 (Ker), wherein the said Supreme Court decision was not understood as laying down that penalty proceedings attract the entire body of principles generally associated with criminal proceedings. The learned counsel for the revenue also invited our attention to a Full Bench decision of the Orissa High Court in CIT v. Gangaram Chapolia [1976] 103 ITR 613. In both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a careful consideration of the matter, we are of the view that the matter stands concluded by the Supreme Court decisions in this regard and should admit of no controversy. CIT v. Anwar Ali [1970] 76 ITR 696 (SC) was a case under s.28(1)(c) of the Indian I.T. Act, 1922, which provided for penalties where the assessee concealed the particulars of his income or deliberately furnished inaccurate particulars of such income. The Supreme Court observed that it appears to have been taken as settled by now in the sales tax law that an order imposing penalty is the result of quasi-criminal proceedings. They also approved the view taken in CIT v. Goculdas Harivallabhdas [1958] 34 ITR 98 by the Bombay High Court. In that case, it was observed that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Maharashtra [1975] 35 STC 571 ; AIR 1975 SC 1549 by stating that the Income-tax Act, 1961, imposes penalty under ss. 270 and 271. These sections in the I.T. Act provide for imposition of penalty on contumacious or fraudulent assessees. It, therefore, appears to us that while applying these dicta to the case the Tribunal cannot be said to have made a wrong approach or misdirected itself on a question of law. It has dismissed the appeal against the order of the AAC and while doing so has supplied an extra ground of support that it was also necessary for the department to show which it failed to do, that the assessee either " deliberately acted in defiance of law " or " its conduct was contumacious or dishonest ". Since the matter stands ..... X X X X Extracts X X X X X X X X Extracts X X X X
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