Law:

Section:

Section 271(1)(a) , read with section 256 of the Income-tax Act, 1961 - Penalty - For late filing of return - Assessment year 1959-60 - Whether question whether there is a reasonable cause for filing delayed return is pure question of fact, and no question of law would arise therefrom - Held, yes FACTS For the relevant assessment year, the assessee did not file the return of income as required by section 22(1) of the 1922 Act, which under the law had to be filed by 1-7-1959. A notice under section 22(2) of the 1922 Act was issued on 5-9-1959, but it came back unserved with the report by the postal authorities that the assessee had refused to receive it. No application for extension of time was filed by the assessee. On 10-1-1961, the ITO addressed a letter to the assessee pointing out that he had failed to file the return under section 22(1) of the 1922 Act and if no return was filed by him within two days, he would be compelled to proceed to complete the assessment for the assessment year in question under section 23(4) of the 1922 Act. The assessee was also called upon to show cause why penalty proceedings under section 28 of the 1922 Act be not taken against him for his failure to file the return in time. The assessee did not send any reply to this letter, which was admittedly received by him. Ultimately, the assessee filed his return on 21-5-1962, declaring his income subject to adjustment of loss in another partnership. Thus, that return was delayed by 34 months. The assessment was completed assessing tax and on appeal tax was reduced the net result was that assessee became entitled to a refund. In penalty proceedings under section 271(1)(a), the ITO imposed a penalty. The Tribunal by its order condoned the delay in filing the income-tax return by the assessee and deleted the entire penalty under section 271(1)(a), holding that assessee being entitled to a refund penalty could not be imposed. On application under section 256(2) : HELD The question whether there is a reasonable cause for filing a delayed return is a pure question of fact and no question of law arises therefrom. It is a well-settled rule that an inference of fact from proved facts is a…

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