Law:

Section:

Section 271(1)(a) of the Income-tax Act, 1961 - Penalty - For late filing of return - Assessment years 1965-66 to 1969-70 - Whether mens rea is not an ingredient of proceedings under section 271(1)(a) - Held, yes - Whether though preliminary responsibility is that of assessee to advance some cause for delay in filing return, no penalty can be levied unless satisfaction of concerned officer indicates that delay was not due to reasonable cause - Held, yes - Whether where reason for delay was stated as family troubles but nature and duration of troubles which stood in way of filing returns in time was not disclosed, ITO was right in refusing to accept family troubles as reasonable cause for delayed filing of returns - Held, yes FACTS The assessee-firms failed to file their returns within the time stipulated by the Act and submitted an explanation that the returns could not be filed in time because the person who was in-charge of the accounts of the firms was unable to attend to its affairs for some time owing to some personal reason. The ITO did not accept the explanation and levied penalties under section 271(1)(a). On revision petitions before the Commissioner it was represented that the delay was due to family troubles. The Commissioner did not accept the explanation and rejected the revision petition. The assessees filed writ petitions in the High Court. The single judge quashed the orders of the Commissioner on the ground that penalties could only the imposed if it was found that the assessee acted deliberately in defiance of the law or was guilty of contumacious or dishonest conduct or acted in conscious disregards of his obligations and not otherwise. He directed the Commissioner to reconsider the matters. On appeal filed by the Commissioner, the Division Bench referred the matter to Full Bench. HELD (PER SAMBASIVA RAO AND ALLADI KUPPUSWAMY) What all clause (a) of section 271(1) expressly requires is that the officer or the AAC has to be satisfied that the assessee has, without reasonable cause, failed to furnish the return within the time allowed. Mens rea is evil intention or knowledge of the wrongfulness of the act that a person commits. That is, the…

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