2000 PLP 3428 (PTD)

31-7-1983 31-7-1984 Papers including signed return sent to CA by assessee on 3-12-1983 19-11-1984 3-12-1983 19-11-1984 Reminded CA on 14-3-1985 14-3-1985 14-3-1985 14-3-1985 Firm's return filed on 21-1-1984 24-1-1985 21-1-1984 24-1-1985 Assessee's return filed on 30-7-1985 30-7-1985 30-7-1985 30-7-1985 Penalty levied 9,554 5,232 7,106 3,460 Period for which penalty levied February, 1984 to July1985 February, 1985 to July1985 February, 1984 to July, 1985 February, 1985 to July1985 There is no dispute that for the assessment year 1983-84 in the case of Shiv Chand Dalmia and Shiv Gopal Dalmia returns have to be filed before July 31, 1983, and for the assessment year 1984-85 before July 31, 1984. It is also not disputed that due to the inability the petitioners sought for extension of time and the Income-tax Officer has also granted extension for filing return up to December 31, 1983, for the assessment year 1983-84 and up to December 31, 1984, for the assessment year 1984-85. According to the petitioners, the relevant papers including the signed return were sent to their Chartered Accountant on December 3, 1983, for the assessment year 1983-84 and on November 19, 1984, for the assessment year 1984-85. It is-also stated that their chartered accountant was reminded by them on March 14, 1985. , Ultimately the firm's return was filed on January 21, 1984 for the assessment year 1983-84 and on January 24, 1985, for the assessment year 1984-85. Since the Inspecting Assistant Commissioner has accepted the delay up to the filing of the firm's return viz., on January 21, 1984 (1983-84) and January 24, 1985 (1984-85), there is no need to refer to the delay up to the said date. As a matter of fact, the said authority has accepted and found that there was a reasonable cause for not filing the return till January 21, 1984. Admittedly, the assessees' (petitioners) return was filed only on July 30, 1985. As rightly observed by the Inspecting Assistant Commissioner, there is no acceptable reason or reasons for the period between January 21, 1984 and July 30, 1985. The only reason given by the petitioners is that they have entrusted all the papers including the signed return to their chartered accountant and due to the fault of the chartered accountant the delay was occasioned. The petitioners also relied on the correspondence between them and their previous chartered accountant. In this regard, it would be useful to refer to section 271(1)(a) of the Income Tax Act, 1961, which reads thus: "271(1).

If. the Income-tax Officer or the Appellate Assistant Commissioner in the course of any proceedings under this Act, is satisfied that any person-- (a) has without reasonable cause failed to furnish the return of total. income which he was required to furnish under subsection (1) of section 139 or by notice given under subsection (2) of section 139 or section 148 or has without reasonable cause failed to furnish it within the time allowed and in the manner required by sub section (1) of section 139 or by such notice, as the case may be, or" A reading of the above provision would go to show that if there is reasonable cause for failure to furnish the return as required under the Act, there is no need to impose any penalty. Learned counsel also very much relied on the Full Bench decision of the Andhra Pradesh High Court in Addl. CIT v. Dargapandarinath Tuljayya & Co.11997) 197 ITR

850. The Judges in the Full Bench while construing section 271(l)(a) of the said Act have observed as under (headnote): "The object of a taxation statute is not only to augment the revenue for the State but also bring about social justice and enable the State to implement social welfare schemes undertaken by it. In order to avoid delay in recovery of tax, the taxation statutes have taken care to provide not only for remedial course but also coercive course. Under the Income-tax Act, there are three modes of enforcement of the obligation to file the return. One is by levying interest, second is by imposing penalty and third is by punishing the assessee, treating his failure to file the return as an offence. While the absence of reasonable cause for failure to file return in time is. sufficient for levy of penalty, the Act requires establishment of element of 'wilful failure' in order to make an offence punishable with imprisonment or fine. Further, under section 271(1)(a), penalty is in addition to the tax and is calculated in relation to the tax assessed. Under section 276-C, for failure to file return, rigorous imprisonment to an extent of one year or fine ranging between 4 and 10 rupees for every day during which default continues, is prescribed as punishment. Thus, it is wholly unrelated to the tax assessed. The decision maintained between section 271(1)(a) and section 276-C brings out the intention of Parliament in providing for two different machines of different magnitude, where different considerations prevail." A reading of the above Full Bench decision as well as the provisions, namely, section 271(1)(a) of the said Act, shows that if there is a reasonable cause, it is not open to the Income-tax Officer to impose a penalty. Here, in our case, except, the statement That they have entrusted the papers to their previous chartered accountant and due to the fault or mistake of the said chartered accountant, the filing of the return was delayed no other material was there. As stated earlier, there is no dispute that the very same chartered accountant on the basis of the instructions given by the petitioners filed the firm's return even on January 21, 1984. It is the case of the petitioners that their major income is only the share income from the other firms. If that is so, there is no acceptable reason for not filing their returns immediately or within a reasonable time. As rightly observed by the Inspecting Assistant Commissioner, there is no acceptable reason for the delay beyond the filing of the return of the firm on April 21, 1984. As a matter of fact, admittedly, the petitioners did not seek for any further extension beyond December 31, 1983, by filing Form No.6. The said aspect was considered by the Commissioner of Income-tax in detail. It is not the case of the petitioners that they were out of station for the entire period of delay. If some more efforts were taken by the assessee, it could have been possible for them to file their 'returns immediately after filing of the firm's return. Mere saying that the delay was due to the fault of their previous chartered accountant cannot be accepted. As rightly observed, it is not the case of the assessee that they have to collect the larger amount of details from the other source of income other than the share income of the firm. Considering the factual position narrated above, the Full Bench decision of the Andhra Pradesh High Court referred to by learned counsel for the petitioners may not be useful for their case. Since both the authorities on the basis of -the factual position came to the conclusion that there was a gross negligence on the part of the petitioners. I do not find any acceptable reason to interfere in the order passed by the respondent. I am satisfied that after considering the petitioner's case, in the light of section 271(1)(a) of the Income Tax Act, 1961, the Inspecting Assistant Commissioner of Income-tax has rightly imposed the penalty and the same has been correctly confirmed by the Commissioner of Income-tax. Under -these, circumstances, I am unable to accept the argument of learned counsel for the petitioner, consequently, all the writ petitions fail and are accordingly, dismissed. No costs. M.B.A./56/FC Petition dismissed.