Law:

Section:

Section 271(1)(a) of the Income-tax Act, 1961 - Penalty - For late filing of return - In assessment year 1962-63 assessee-partnership firm intended to make voluntary disclosure of its income but dispute arose between partners as to disclosure or its quantum - However, a disclosure was filed under the Finance Act, 1965 and as a result, return was filed late - Whether assessee had sufficient cause for late filing of return and, therefore, no penalty could be imposed under section 271(1)(a) - Held, yes Facts In the relevant assessment year 1962-63 the assessee-partnership firm was intending to make a voluntary disclosure of its income. However, a dispute arose between the partners as to the disclosure or its quantum. In fact subsequently, the assessee filed a disclosure under the Finance Act, 1965. As a result the return was filed late and the ITO initiated penalty proceedings under section 271(1)(a). The ITO held that there was no connection between not filing the return in time by the assessee and the voluntary disclosure scheme and levied the penalty under section 271(1)(a). On second appeal, the Tribunal accepted the reasons for delay in filing of the return to be sufficient cause shown by the assessee against the proposed imposition of penalty. On reference: Held In the instant case, the assessee, in any event, had been contemplating to make a disclosure, whether the same would result in any advantage to it or not. Indisputably, the assessee had, subsequently, made a voluntary disclosure. In the circumstances, the Tribunal was justified in setting aside the penalty imposed. B.K. Bagchi and B.K. Naha for the Applicant. JUDGMENT Sen, J.-Kanhayalal Mukundlal, the assessee, was assessable to income- tax in the assessment year 1962-63, the accounting year ending some- time in April 1962. The assessee was required to file its return by 12-10-1962, but filed the same on 14-1-1936. 2. For the delay in submission of its return the ITO initiated penalty proceedings against the assessee. In reply to a show-cause notice issued by the ITO it was contended by the assessee that the return had been filed late because the assessee had been contemplating to file a voluntary…

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