Law:

Section:

Section 271(1)(a) of the Income-tax Act, 1961-Penalty-For late filing of return-Penalty imposed on assesses, a registred firm, for late filing of return-Cause shown for delay by assessee was that its accountant, aged 80, was ill-Said explanation had been rejected by ITO-Whether tribunal rightly deleted penalties on the ground that department had not discharged its initial burden that delay was without reasonable cause-Held, on facts, no Facts The assessee, a registered firm, belatedly filed its returns for the assessment years 1968-69 and 1969-70. The assessee explained that it could not file the return in time as its accountant, who was 80 years old, was not keeping well. The assessee also stated that it had applied for extension of time. The ITO found that the assessee had not applied for extension of time and, holding that the assessee's explanation was not reasonable, imposed penalties for late filing of the return for the relevant assessment years. The ITO's action was confirmed by the AAC on appeal. On further appeal, although the Tribunal found that the cause shown by the assessee was hardly adequate, it observed that there was nothing on record to show that the assessee was aware of its liability to file the return in time or that it was made aware of its default for late filing of return. In this view, the Tribunal held that the department had not discharged the initial burden of proving that the assessee had failed to file the returns in time without reasonable cause and cancelled the impugned penalty. On reference: Held It is true that the initial burden is on the revenue to establish by leading some evidence that prima facie the assessee had, without reasonable cause, failed to furnish the return within the time specified in section 271(1)(a ), but it is clear from the evidence in the instant case that the revenue had discharged this burden. All that requires to be done in order to discharge the initial theoretical burden is to show that no application for extension of time was made and there did not prevail a situation in the city or town concerned which made it difficult or impossible to do so ( for instance, the city may be in the grip of some…

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