Law:

Section:

Section 271(1)(a) of the Income-tax Act, 1961 - Penalty - For late filing of return -Whether merely because ITO's calculation of period of delay in filing of return was incorrect, his entire order imposing penalty under section 271(1)(a) could be set aside - Held, no Facts For the relevant assessment year 1973-74 the ITO imposed certain penalty upon the assessee-society under section 271(1) for late filing of the return by 25 months. On appeal, the Tribunal found that delay in filing of the return was actually 23 months and, therefore, set aside the entire penalty imposed by the ITO. On reference: Held In the instant case, the mere fact that the delay was of 23 months instead of 25 months calculated by the ITO in filing the return was insufficient to set aside the entire penalty as had been done by the Tribunal. That being the only reason for setting aside the entire penalty, the action of the Tribunal was clearly not justified. Editor's note Since the Tribunal failed to consider the assessee's contention regarding existence of sufficient cause for the delay in filing the return, the matter was remanded back to it to decide on merits before deciding the question of penalty finally in appeal. B.K. Rawat for the Applicant. B.L. Nema for the Respondent. JUDGMENT Verma, Actg. CJ.-This is a reference under section 256(1) of the Income-tax Act, 1961 ('the Act') at the instance of the revenue to decide the following questions of law: "1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in setting aside the penalty imposed under section 271(1)(a) of the Income-tax Act, 1961 for apparent mistake of calculation in working out the penalty? 2. Whether, on the facts and in the circumstances of the case, the Tribunal should have directed the Income-tax Officer to recalculate the penalty according to law?" 2. The material facts are these: The assessee is a co-operative society. The relevant assessment year is 1973-74 for which the previous year ended on 30-6-1972. For that assessment year, the voluntary return of income was to be filed up to 15-8-1973. The return was filed actually on 8-10-1975. The ITO imposed a penalty of Rs.…

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