9911796707
TMI Blog1996 (4) TMI 144X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 57,616 Rs. 33,000 Total income assessed after appeal Rs. 90,667 Rs. 33,000 Penalty under section 271(1)(a) levied by the ITO Rs. 33,227 Rs. 4,263 Relief given by the Commissioner (Appeals) Directed the ITO to Confirmed recompute the quantum on the basis of finally assessed income 3. In order to appreciate the rival contentions of the parties, it would be necessary to state certain facts which could be gathered from the material placed before us. (a) The assessee was a confirming party in respect of the sale of land (Bungalow No. 14) by Shri J. K. Samstha Khadayat Chhatralaya (the Chhatralaya) to Yoginager Co-operative Housing Society (the Society), in two documents registered on 26-10-1967 and 4-12-1967. (b) The assessee received certain commission from the society during the relevant years as well as in the assessment year 1971-72. (c) As the transaction took ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the assessment year 1970-71. Since the ITO has framed the assessment for the assessment year 1970-71 on protective basis, the Commissioner (Appeals) held that the said assessment should be treated as regular assessment. Both the revenue as well as the assessee have accepted the order of the Commissioner (Appeals) in the quantum matter. 4. In the meanwhile, the ITO initiated the proceedings under section 274/271(1)(a) of the Act, and called upon the assessee to show cause why penalty should not be imposed for the late submission of the retains of income for the years under consideration. Vide its letters dated 2-3-1982 and 18-3-1982, the assessee resisted the action of the ITO, in the following manner : "Letter dated 2-3-1982 : Kindly refer to your letter dated 9-2-1982 on the subject cited above. The assessee-firm has preferred appeal before the Tribunal for assessment years 1968-69 and 1969-70. I have therefore to request you to kindly keep the penalty proceedings in abeyance till the decision of appeal as per section 275(a)(ii) of the Act." "Letter dated 18-3-1982 : On behalf of the above assessee, I have to submit that the assessee acted as a confirming party in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the event of the society losing the appeal before the Deputy Collector (Tenancy Appeals), the assessee might have to return back the commission received by it from the society. He, therefore, urged that since the assessee has a reasonable cause for not filing the returns on or before the due date as contemplated under section 139(1), the Commissioner (Appeals) ought to have canceled the penalty imposed under section 271(1)(a). 7.1 At the time of hearing, the learned counsel for the assessee also took up a legal issue, viz., since the ITO has charged interest under section 139(8), no penalty could have been imposed by him under section 271(1)(a). For this proposition, he relied on the decision of the Hon'ble Supreme Court in the case of CIT v. M. Chandra Sekhar [1985] 151 ITR 433 and of the Hon'ble Gujarat High Court in the case of Liberal Engg. Works v. CIT [1985] 23 Taxman 588. Relying on the decision of the Hon'ble Gujarate High Court in the cases of Omkar Estate Corpn. v. CIT [1982] 138 ITR 635 and Smt. Ramalaxmi Jivraj v. CIT [1982] 138 ITR 731, the learned counsel for the assessee submitted that since the initial burden which lay on the revenue has not been discharged, no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h was subsequent to the date of starting of the dispute. He also highlighted the fact that the assessee has filed returns of income in compliance with the notices issued under section 148, 'under protest' which clearly indicates that the assessee had not filed its returns of income on or before the due dates as contemplate under section 139(1) with the intention of evading payment of tax. In other words, he submitted that there was not mala fide intention in not filing the returns of income on or before due dates as contemplated under section 139(1), but there was a deliberate attempt to evade the payment of tax. Relying on the decisions of the Hon'ble Gujarate High Court in the case of S. Balaram v. CIT [1976] 105 ITR 674, he submitted that even in the proceedings initiated under section 148, penalty could imposed under section 271(1)(a), in respect of the default committed in not filing returns originally. 8.1 As regards the legal issue taken up on behalf of the assessee at the time of hearing, the learned representative for the department strongly urged that the aforesaid decisions in the cases of M. Chandra Sekhar and Liberal Engg. Works are no authority for universal applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he evidence available on record, the assessee was a confirming party in respect of the transaction of Bungalow No. 14 only and not Bungalow No. 15 for which the litigation had started under the Bombay Lad Revenue Act/Rules. Therefore, we entirely agree with the submissions made on behalf of the revenue that the assessee cannot take shelter for the delay in filing the returns of income as it was to a party to the said litigation. Again, it is not in dispute that Rs. 90,667 was taxable in the assessment year 1969-70 and Rs. 33,000 was taxable in the assessment year 1970-71. In fact, on going through the order of the Deputy Collector (Tenancy Appeals), it is difficult to hold that the commission received by the assessee from the society was in jeopardy. Therefore, we have no hesitation in holding that the assessee had no reasonable cause in filing the returns of income late. 9.1 As regards the implication of the charging of the interest under section 139(8), the stand taken on behalf of the revenue is well founded and should be accepted. Comparative particulars of the relevant reported cases and that of the assessee are tabulated below :. ------------------------------------------ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Omkar Estate Corpn. and Smt. Ramalaxmi Jivraj. In our opinion, the revenue would be required to discharge the initial burden which lay upon it provided the assessee had filed its returns of income within the limit prescribed under section 139(4). In our view, the decision in the case of Brij Mohan relied upon on behalf of the assessee would have no bearing to decide the point at issue. In the case of Maya Rani Punj, the Hon'ble Supreme Court has held that the default committed in not filing the return is a continuing default. Again, even assuming for the sake of arguments that the period of delay should be reckoned from 31-3-1972 and 31-3-1973, respectively, for the two years under appeal, being the last date for filing the return under section 139(4). there is no scope of giving any relief in the quantum of penalty as such period would still be more than 25 months in each of the years under appeal. In this view of the matter, we do not find any justification to interfere with the order of the Commissioner (Appeals) under appeal. 10. Before we part with this order, we would like to express our appreciation for the manner in which both the learned counsel for the assessee and the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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