Law:

Section:

Section 271(1)(a) , read with section 276 of the Income-tax Act, 1961 - Penalty - For late filing of return - Assessment years 1964-65 and 1965-66 - Whether before any penalty can be levied on assessee under section 271(1)(a), there should be proof of mens rea on part of assessee - Held, yes - Whether rigour of principle applicable to criminal prosecution will not apply to proceedings under section 271(1)(a ), so that even in a case where assessee fails to extend co-operation and withholds any explanation for delay in filing return he is not liable to be penalised unless department established that he had acted in deliberate disregard of his statutory obligations - Held, yes - Assessee's explanation that delay in filing return was caused on account of non finalisation of statutory audit in time; that there wal labour troubles in workshop ; that ITO having not completed assessment under section 144 was fully satisfied with existence of reasonable cause, and that ITO having levied interest under section 139 could not also levy penalty, were rejected by ITO and penalty under section 271(1)(a) was levied - Both AAC and Tribunal confirmed levy of penalty - Whether since merely on disbelieving assessee's explanation ITO had not applied his mind to requirements of statute, and also there were no materials to come to conclusion that assessee had no reasonable cause on facts, penalty levied by ITO under section 271(1)(a) was not proper - Held, yes Section 254 of the Income-tax Act, 1961 - Appellate Tribunal - Powers of - Whether question framed by Tribunal should not ordinarily be related merely to arguments advanced before it to reach particular conclusion, but should be with reference to conclusion, as such, which was attacked - Held, yes Words and phrases: Expression 'without reasonable cause' as occurring in section 271(1)(a) and section 276 of the Income-tax Act, 1961. FACTS In regard to late filing of return for the relevant assessment years, the assessee explained that the return could not be filed in time because the finalisation of the statutory audit relating to company 'V' which was the only source for gathering the materials required for the preparation of…

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