Law:

Section:

Section 271(1)(a) of the Income-tax Act, 1961 - Penalty - For delay in filing return - Assessment year 1964-65 - Whether assessee has to satisfactorily explain delay for not filing return within period of limitation prescribed and it is not for revenue to establish that assessee has failed to furnish return within time without reasonable cause - Held, yes - Assessee failed to file return on time - ITO levied penalty under section 271(1)(a) which was sustained by AAC - Tribunal cancelled penalty on ground that department had not challenged correctness of facts stated by assessee explaining said delay - Whether since very case of Department before Tribunal was that assessee had not satisfactorily explained delay in filing return, reasoning of Tribunal was illegal - Held, yes - Whether, therefore, order of Tribunal must be held to be erroneous and contrary to law - Held, yes [Matter remanded back to Tribunal] FACTS The respondent-assessee, an individual, filed his return of income beyond the prescribed limit. The ITO holding that the assessee failed to file the return within the prescribed time-limit without reasonable cause imposed a penalty under section 271(1)(a). The appeal preferred by the assessee to the AAC was unsuccessful. On further appeal, the Tribunal held that the onus was on the revenue to establish that the assessee was guilty of conturmacious conduct and that he failed to furnish the return in time. In that view of the matter, Tribunal cancelled the penalty holding that revenue failed to discharge said onus. On reference : HELD Full Bench of this Court in Addl. CIT v. Dargapanderinath Tuljayya & Co. [1977] 107 ITR 850 (AP), has held that the assessee has to satisfactorily explain the delay for not filing the return within the period of limitation prescribed and that it is not for the revenue to establish that the assessee has failed to furnish the return within time without reasonable cause. In this view, the Tribunal 's legal reasoning in arriving at the conclusion that there was no justification for the levy of penalty under section 271(1)(a ) was illegal and erroneous in law. The very case of the Department before Tribunal was that the…

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