9911796707
TMI Blog1988 (4) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... of the AAC and it has further been contended that the AAC was not justified in ignoring to consider various contentions raised before him by the Cross-objector. 3. Due dates for filing the returns for the two assessment years original or extended, were 24th Jan., 1971 and 15th Aug., 1972, respectively. Returns were actually filed on 25th Aug., 1972 and 21st may, 1973, respectively. Since the returns were late, the ITO initiated penalty proceedings under s. 271(1)(a) and imposed penalties. 4.The penalties levied were challenged in appeal before the AAC. It was urged before him that search had taken place on the business premises of the assessee on 25th Jan., 1971 as a result of which books of account of the assessee for the asst. yrs.1969 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which exercise had taken several months. It was also stated that while copying out the seized record, the Accountant of the assessee committed mistakes which resulted in the delay in finalising the accounts. It was also urged that the books of account for the financial year 1971-72 relevant to the asst. yr. 1972-73 could not be finalised unless the books of account for the earlier years were closed and the balances available. According to the assessee these constituted reasonable cause on account of which the assessee was prevented from filing the returns. It was also stated that the assessee had made voluntary disclosure of income under s. 14 of the Voluntary Disclosure Act at Rs. 1,29,627 for the asst. yr. 1970-71 and Rs. 64,202 for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Gauhati High Court, referred to above, no penalty was exigible as no tax was payable with reference to the firm treated as registered firm. Regarding reasonable cause for delay in filing the returns, the ITO was requested by the AAC to let him know as to how many opportunities were afforded to the assessee for purposes of copying out those books of account which had been seized in seizure operation conducted by the Department on 25th Jan., 1971. The ITO submitted his report vide letter dt. Nil in response to the letter issued by the AAC on 12th Dec., 1984. The AAC has observed that the ITO afforded opportunities to the assessee on different dates for inspection and copying out the extracts of accounts for the asst. yrs 1969-70 and 1970-71 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-s. (7) of s.14 of the Voluntary Disclosure Act and pointed out that immunity granted under sub-s. (1) of s. 14 shall not apply in relation to any income which has been included in the total income of the declarant in any assessment made by the ITO before the date on which the declaration under the sub-section is made. He, therefore, urged that the income returned or assessed before the date of declaration did not enjoy any immunity. He further contended that penalty was exigible as URF. Even though no tax was payable on the basis of a registered firm still the penalty was exigible. For this proposition he relied on a few judicial authorities. On the point of reasonable cause for delay in filing the returns, he submitted that large numb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of any of the said Acts except under s. 221 of the IT Act, etc. A perusal of the above provisions of law r/w sub-s. (7) of s. 14 of the Voluntary Disclosure Act reveals that the amount of income voluntarily disclosed shall not be taken into consideration for purposes of imposition of penalty. The other income declared in the return or assessed before making the declaration shall be ignored. The learned Counsel for the assessee has excluded the amount voluntarily disclosed and worked out the tax as regd. firm on the balance income. The provisions of sub-s. (7) of s. 14 of the Voluntary Disclosure Act have clearly been complied with. He has furnished the data about tax as registered firm on the income other than declared. It shows a case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e mistakes in copying out which resulted in further delay in reconciling the accounts and preparation of balance-sheets. In our opinion this also constitutes reasonable cause for not filing the returns within the time allowed. We are also in agreement with the AAC that mens rea is not required to be proved by the ITO in proceedings under s. 271(1)(A). What is required is the existence of reasonable cause which has to be shown by the assessee and not the ITO. In view of the above discussions we find no justification to interfere with the order of the AAC for both the years cancelling penalties. 8.As noted earlier, one of the grounds of cross Objections is supporting the order of the AAC. Since we have confirmed the order of the AAC, this gr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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