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TMI Blog1975 (9) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... stified in deleting levy of penalty under section 271(1)(a) of the Income-tax Act of 1961 ?" The assessee is a firm. The relevant years of assessment are 1963-64, 1964-65 and 1965-66. The assessee was required to file its return of income under section 139(1) of the Act for these assessment years by June 30, 1963, June 30, 1964, and June 30, 1965, respectively. As a fact, however, the assessee filed returns for all the three years on December 27, 1966. The Income-tax Officer found that there had been default in filing of the returns and accordingly initiated penalty proceedings under section 271(1)(a) of the Act and imposed penalties of varying amounts for these years. The explanation given by the assessee before the Income-tax Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulty in preparing the balance-sheets but I visualise no difficulty in preparation of the trading account, profit and loss account, etc., for the three years under present consideration merely because the books of account for the earlier years were seized by the sales tax department. Secondly, when according to the appellant's own submission, the returns of income were getting delayed, the appellant should have requested the concerned sales tax authorities as well as the Income-tax Officer and should have brought to their notice that for no fault of the assessee the returns of income were getting delayed. By making such request the appellant could have had access to his own books of account when they remained in the custody of the sales tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the matter both as a question of fact, that is, as to whether there was a reasonable explanation before the taxing authorities and as a proposition of law as to whether penalty could be levied. On both the scores, it found in favour of the assessee and accordingly directed deletion of the penalties. We have little doubt, in view of the legal position indicated by a Full Bench of this court in the case of Commissioner of Income-tax v. Gangaram Chapolia, that the view taken by the Appellate Tribunal on the legal aspect is erroneous. Undoubtedly, it was for the assessee to show reasonable cause for the delay in complying with the statutory requirement of making a return of the income within the time specified. What the extent of that burde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng a question of fact like this. But whether in a given case considering the peculiar facts thereof including seizure of accounts and return thereof after three years, a longer period would be reasonable would ultimately depend upon its own facts and if the Appellate Tribunal--the final forum of fact--holds that two years is a reasonable period, the same cannot be assailed in a references by saying that the view of the Tribunal is wholly untenable in law. While making it expressly clear that we do not agree with the view of the Tribunal on the legal aspect, we have come to the conclusion that the Tribunal as a fact has found that the delay in making of the returns has been explained by the assessee and the cause shown is a reasonable one. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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