Law:

Section:

Section 271(1(a) of the Income-tax Act, 1961 - (Corresponding to section 28(1)(a) of the Indian Income-tax Act, 1922) - Penalty - For late filing of return - Assessment years 1960-61 and 1961-62 - Whether where assessee-firm's income was below taxable limit and thus there being no liability to file return, penalty for delay in filing of return under section 271(1)(a) could not be imposed - Held, yes FACTS For the assessment years 1960-61 and 1961-62, returns had been submitted out of time. Penalty was, therefore, sought to be imposed on the firm under section 28(1)(a) of the 1922 Act, for not having complied with section 22(1) of the 1922 Act. Though the ITO imposed penalty for the two years, the Appellate Assistant Commissioner set aside the orders imposing penalty on the ground that the firm which was duly registered under the Act had no income in excess of the maximum amount not chargeable to tax during the two corresponding previous years to the assessment years 1960-61 and 1961-62. It was, therefore, held that there was no obligation on the part of the firm to file any return. Consequently, it was held that no penalty could be imposed under section 28(1)(a) of 1922 Act. The contention raised was that at the time (when the return should have been filed), the firm was obliged to file a return under section 22(1) of 1922 Act, as it could not be taken to have been registered then, the certificate of registration being dated 26-3-1962, a date after the date before which the return should have been submitted. It was held that the registration would have effect for the assessment year and must, therefore, govern the provision relating to the submission of returns for that assessment year. This view of the Appellate Assistant Commissioner had been accepted by the Tribunal On reference : HELD Only a person who without reasonable cause fails to furnish the return of his total income which he was required to furnish by notice given under sub-section (1) of section 22 of 1922 Act, is liable to be penalised for failure to submit a return generally. Section 22(1) of 1922 Act, enjoins on every person 'whose total income during the previous year exceeded the maximum…

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