9911796707
TMI Blog1974 (4) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... la and Ravinder Lal Kuthiala, and widow, Smt. Lila Devi, were brought on the record as legal representatives in both these cases. The Income-tax Case No. 15 of 1972 relates to the assessment year 1959-60 and the Income-tax Case No. 16 of 1972 relates to the assessment year 1960-61. The facts of Income-tax Case No. 15 of 1972 are that for the assessment year 1959-60, the assessee did not file the return of income as required by sub-section (1) of section 22 of the Indian Income-tax Act, 1922, which under the law had to be filed by 1st July, 1959. A notice under section 22(2) of the said Act was issued on September 5, 1959, but it came back unserved with the report by the postal authorities that the assessee had refused to receive it. No application for extention of time was filed by the assessee. On January 10, 1961, the Income-tax Officer addressed a letter to the assessee pointing out that he had failed to file the return under section 22(1) of the said Act and if no return was filed by him within two days, he will be compelled to proceed to complete the assessment for the assessment year in question under section 23(4) of the Act. The assessee was also called upon to show caus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n proportion to the gross tax, but in proportion to the tax as finally determined to be payable under the demand notice. Finally, it was determined that no tax was payable and the assessee was entitled to a refund of Rs. 4,600 and, therefore, no penalty could be imposed. Feeling dissatisfied, the Commissioner of Income-tax, Delhi III, New Delhi, made an application under section 256(1) of the Income-tax Act, requiring the Income-tax Appellate Tribunal to refer the above-mentioned question of law for the opinion of this court. The Tribunal held by its order dated February 19, 1972, that the findings of the Tribunal were pure findings of fact and that question of law did not arise and the application of the revenue was declined. Thereafter, the present petition was filed by the revenue under section 256(2) of the Income-tax Act, 1961. Similar are the facts of Income-tax Case No. 16 of 1972. In that case, the Income-tax return was to be filed on or before November 23, 1960, but it was filed by the assessee on May 30, 1962, and thus there was a delay of 47 months in filing the return. As for the year 1959-60, in the final assessment for this year, i.e., 1960-61, the final assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up to the period the return remained unfiled because when the assessee asked for time and there was no reply from the Income-tax Officer, the assessee could be taken to be under a reasonable belief that its request had been conceded to. We need not go to the other grounds as they cease to be of any consequence in view of our order above." The Tribunal, in paragraph No. 2 of that order, dated August 14, 1970, also observed as follows : " The learned counsel urged that as there was no tax payable because there was ultimately a refund due to the assessee, the penalty could not be imposed or, at the most, the penalty should be related to the tax payable as per the demand notice which was Rs. 19,717. If we take into consideration the penal interest of Rs. 12,723, which is included in the total demand of Rs. 19,717, the tax payable comes to Rs. 7,390. The learned counsel urged that the penalty is relatable only to the tax payable, if any. When the tax payable is, at the worst for the assessee, Rs. 19,717, at the point of time when the penalty was imposed, the penalty as sustained by the Appellate Assistant Commissioner is far too excessive. He urged that, in the ultimate, the tax p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellate Tribunal was justified in reducing the quantum of penalty having been satisfied that the offence of concealment was there without any doubt ? " In Income-tax Case No. 28 of 1972, the Commissioner wanted the following two questions of law to be referred for the opinion of this court " (1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified to hold that the assessee had a reasonable cause for late filing of return in March, 1968 ? (2) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified to hold that there was a delay of one month only till February, 1964, when actually under section 139(1) the delay was from October 1, 1963, to February 18, 1964, for four months ? " The learned judges held that the question to be referred in each of the Income-tax Cases Nos. 26 and 27 of 1972 did arise for the opinion of this court and so also question No. 2 in Income-tax Case No. 28 of 1972. However, question No. 1, in Income-tax Case ND. 28 of 1972, was held to be not a question of law arising out of the Tribunal's order and, therefore, it could not be required to be referred for the opin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perverse and is not rationally possible, vide Oriental Investment Co. P. Ltd. v. Commissioner of Income-tax, G. Venkataswami Naidu and Co. v. Commissioner of Income-taxs, and Commissioner of Income-tax v. Rajasthan Mines Ltd. In the instant case, the Appellate Tribunal held that the assessee had reasonable cause for not filing the return up to the period the return remained unfiled because the assessee's submission asking for time to extend the period remained unreplied by the Income-tax Officer and the assessee could be taken to be under a reasonable belief that his request had been acceded to and, therefore, the assessee was under no obligation to file the return. This is a pure question of fact in view of the observations made in the above-mentioned case by the Supreme Court. In my opinion, no question of law arises in both these Income-tax Cases Nos. 15 and 16 of 1972 out of the orders of the Tribunal and, therefore, no direction is to be issued to the Tribunal to refer the question mentioned above in the earlier part of this judgment for the opinion of this court. There is no substance in both these petitions and the same are dismissed. There will be no order as to costs. D ..... 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