Law:

Section:

Section 271(1)(a ) of the Income-tax act, 1961-Penalty-For late filing of return-assessee-firm applied on 29-6-1966 for filing its return by 30-9-1966, as against due date being 30-6-1966, but received no reply from ITO-Assessee, however, received on 14-10-1966 a notice under section 139(2) under which return was due by 14-11-1966-Return eventually filed on 1-12-1966-Whether there was a reasonable cause for delay up to 14-11-1966-Held, on facts, yes-Whether each period covered a distinct and independent default-Held, yes-Whether penalty could be levied if period of default was of less than one month-Held, no Facts For the assessment year 1966-67, the assessee-firm applied to the ITO on 29-6-1966 for furnishing its return up to 30-9-1966, as against the date being 30-6-1966 and did not get any reply. The assessee got on 14-10-1966 a notice under section 139(2) in pursuance of which the return was due on 14-11-1966. It was, however, filed on 1-12-1966. The ITO eventually levied on 31-1-1972 a penalty for default under section 271(1)(a). While the AAC confirmed the levy, the Tribunal deleted the same holding, inter alia, (i) that the assessee was justified in presuming that the time to furnish the return was extended up to 30-9-1966; (ii) that before expiry of one month after 30-9-1966, a notice under section 139(2) was served on 14-10-1966 and, thereafter, the assessee bona fidely believed that it was entitled to furnish the return up to 14-11-1966; and (iii) that the ultimate unreasonable delay involved in filing its return on 1-12-1966 was less than a month. On reference: Held Failure without reasonable cause to furnish the return within the specified time is an ingredient of the offence and the legal burden is on the department to establish the same by leading some evidence. In the instant case, for the two periods, namely, 1-7-1965 to 30-9-1966 and 14-10-1966 to 14-11-1966, there was material before the Tribunal to come to the conclusion that there was reasonable cause for the assessee not to furnish its return of income within the time specified by law. With regard to the other periods from 1-10-1966 to 13-10-1966 and 15-11-1966 to 1-12-1966, the Tribunal…

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