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TMI Blog1990 (7) TMI 156X X X X Extracts X X X X X X X X Extracts X X X X ..... m the quantification of penalty. It was further submitted that the assessee faced many adverse circumstances due to failure of its pictures and from busy professional schedule as cine artiste. It was further submitted that on 24-1-1981 the assessee had suffered a major heart attack and, therefore, delay beyond 24-1-1981 should be condoned more so because within 61/2 months of the major heart attack the assessee had filed the return. The Assessing Officer rejected all these contentions. The CIT(A) took note of the position that time upto 30-9-1979 was sought by filing Form No. 6 on 27-7-1979 and the IAC had not rejected that application. Inspite of making this observation the CIT(A) did not allow exemption from penalty even for the period of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the delay covered by the application in Form No. 6 seeking extension of time should be excluded from the quantification of penalty. This is so because the Assessing Officer had not rejected that application and the assessee would be reasonably presuming that the extension had been granted. We agree with the departmental officers that delay beyond 30-9-1979 and upto the date of the heart attack i.e., 24-1-1981 has not been explained, and this period should be considered for quantification of penalty. We further agree on merits that beyond the date of heart attack i.e., 24-1-1981 when the return was filed on 4-8-1981 it is reasonable to allow 6 to 7 months for filing the return after the massive heart attack. However, the point is that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... default continued. Without sanction of law, no penalty is imposable with reference to the defaulting conduct. The position that penalty is imposable not only for the first default but as long as the default continues and such penalty is to be calculated at a prescribed rate on monthly basis is indicative of the legislative intention in unmistakable terms that as long as the assessee does not comply with the requirements of law, he continues to be guilty of the infraction and exposes himself to the penalty provided by law." 8. In the context of continuing delay and quantification depending upon duration of delay some assistance may be had also from the aspect of quantification of interest under section 220(2) for delay in payment of tax i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mission of wealth-tax return. The basis of quantification was changed statutorily from 1-4-1969. Delay fell partly before 1-4-1969 and partly after 31-3-1969. The Bombay High Court held that quantification of penalty for the delay upto 31-3-1969 should be as per unamended provision and for the period from 1-4-1969 it should be as per the amended provision. On that basis the total penalty leviable should be computed. Thus, the principle of applicability of different basis for two different parts of delay was propounded. The point is that different factors may be applicable to different parts of delay on whose basis quantification is to be done. 10. Yet another analogous concept comes from the cases involving limitation for filing of appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f penalty is vide section 271(1)(a) for failure without reasonable cause to furnish the return within the time allowed. So the moot point is whether the default as envisaged in section 271(1)(i)(b) is the total delay or only the unexplained delay. It is possible to take a view that that default an envisaged in section 271(1)(i)(b) is that of unexplained delay rather than the total delay of which a part is explained and the other part is unexplained. 13. We may hasten to add that we are not considering a case in which a part of explained delay (chronologically speaking) is sandwiched between two parts of unexplained delay. Different considerations may apply to such a case as, for example, the department may claim that the existence of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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