9911796707
TMI Blog1993 (6) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... as filed late, penalty proceedings under s. 271(1)(a) were initiated. The appeal effect to the order of the Tribunal arising out of the appeal of the assessee as well as the Department was given, and subsequently a show-cause-notice was issued to the assessee on 23rd Feb., 1988. The assessee gave reply vide its letter dt. 5th March, 1988 making the following points: (i) The assessee has filed application in Form No. 6 asking for extension of time four times i.e. on 28th June, 1979, 30th July, 1979, 4th Jan., 1980 and 29th Feb., 1980. For the first application, time was allowed up to 30th July, 1979 and the decision was communicated to the assessee on 20th July, 1979. For the second time, rejection order was communicated to the assessee on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by an unauthorised person. The valid return was filed by the assessee on 22nd Aug., 1980. According to the assessee, the delay for filing of income-tax return was occurred due to non-completion of audited accounts. This contention was rejected by the ITO on the ground that the assessee is having a number of employees including a Chartered Accountant in its establishment to complete the books of account in time. Thus, the ITO observed that the explanation given for the delay is not satisfactory. The ITO also took into consideration that during proceedings under s. 264, the learned CIT had found that the assessee was not prevented by sufficient and reasonable cause in filing the return of income. Thus, for the delay of 12 months, the penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also the date of commencement of audit by the new auditors is also not available. For the asst. yr. 1977-78, the audit report was approved by the Board on 25th March, 1980. 5. One of the reasons for rejection of the assessee's contention that the books of account for the year under consideration were not ready by the Assessing Officer is that, "it is delayed by complete 18 months, which is a very long period and by any standard, it cannot be said to be a reasonable period". However, the submission of the assessee that the assessee had changed its auditors and for this purpose, it took a little more time, in our view, is a reasonable explanation. Further, penalty proceedings for asst. yr. 1978-79 were dropped by the Department. Further, v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 271(1)(a) is bad in law and it was set aside accordingly. In the case of Ravi Textile (P) Ltd. vs. IAC (1986) 15 ITD 49 (Del), the Delhi Bench of the Tribunal held that the penalty can be levied in case of an assessee not for the entire period of delay for filing the return, but only for period from date of completion of audit to the date of filing of return. 7. Coming to the defect with regard to the signature pointed out by the Department, the learned counsel for the assessee relying upon the decision of the Hon'ble Patna High Court in the case of CIT vs. Kalyani Selected Kargallia Colliery (1983) 35 CTR (Pat) 272 : (1984) 148 ITR 468 (Pat) submitted that the levy of penalty for the period from date of filing of the original return to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee and, hence, this cannot be taken as a reasonable cause for delay in submission of the return. The learned Departmental Representative further contended that the search and seizure proceedings had no impact for preparation of the return since the assessee has got sufficient staff including a Chartered Accountant. The learned Departmental Representative further contended that the assessee at least should prove that all the necessary steps were taken for completing the books of account and audit report before lapse of time. In the instant case of the assessee, no such evidence was brought to the notice of the Revenue authorities. The learned Departmental Representative placed reliance on decision of the Hyderabad Bench (SMC) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee's further contention that he bona fidely believed that the officer who signed the return was a competent person, this also is a possible and reasonable belief and as such, in any case, the gap between filing of the first return and the date of availability of the audit report for the purpose of filing the return cannot be considered for levy of penalty. The cases relied upon by the assessee are to the point and in favour of the assessee. On the other hand, the reliance placed by the learned Departmental Representative on the decision of Hyderabad Bench of the Tribunal in the case of Potta Hargopal vs. ITO is distinguishable. In that case, the fact that weighed against the assessee was the non-receipt of partner's income particulars an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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