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TMI Blog1978 (3) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... ,494. It is alleged that notice under s. 22 of the Indian I.T. Act, 1922, was served on the non-applicant on June 20, 1961, and the return was due to be filed within 35 days thereof. The return, however, was ultimately filed on 21 st December, 1962. The ITO by his order dated February 15, 1968, held that there was delay of 17 months in filing the return. He, therefore, issued a notice for showing cause for penalty under s. 271(1)(a) of the I.T. Act, 1961. It appears that the non-applicant did not appear and no explanation was submitted. A penalty, therefore, of Rs. 20,393 was levied by orders dated February 15, 1968. Against this order the non-applicant preferred an appeal before the AAC and the AAC by his order dated December 20, 1968, hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n holding that no penalty could be levied under section 271(1)(a) of the Income-tax Act, 1961 ? (2) Whether the Appellate Tribunal was right in holding that the penalty was leviable only under section 271(3)(b) and in further reducing the penalty to Rs. 25 only ? " are questions of law and the Tribunal be directed to state a case. It is not in dispute that in the assessment proceedings ultimately the Tribunal assessed the income at Rs. 22,017 only and it is also not in dispute that for the year under assessment a registered firm with income over Rs. 40,000 only was taxable and, therefore, the non-applicant firm had income which did not fall within the taxable limits. Both the learned counsel frankly conceded that in a reference agains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 25 and, therefore, the Tribunal ordered the imposition of penalty of Rs. 25. Section 271(1)(a) of the I.T. Act, 1961, runs: "271. (1) If the Income-tax Officer ...... is satisfied that any person- (a) has without reasonable cause failed to furnish the return of total income which he was required to furnish under sub-section (1) of section 139 or by notice given under sub-section (2) of section 139 or section 148 or has without reasonable cause failed to furnish it within the time allowed and in the manner required by sub-section (1) of section 139 or by such notice, as the case may be, or ...... he may direct that such person shall pay by way of penalty,-..." The language of this section indicates that if one has failed to fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered the question of penalty under s. 271(1)(a) of the Act and observed: " The very phrase 'without reasonable cause' vests some kind of discretion in the authority imposing the penalty to find out whether there was reasonable cause or not. If in the opinion of the authority there was reasonable cause, in that case, no penalty whatsoever may be imposed. However, if there was no reasonable cause, in that case, imposition of penalty is mandatory." And after considering the facts of that case their Lordships further observed : " As such, the question of existence or otherwise of a reasonable cause in the instant case would be a pure question of fact and not a question of law. We cannot be approached for requiring the Tribunal to r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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