Law: Income Tax Act, 1961

Section: 139(2),271(1)

Section 271 (1)(a) of the Income-tax Act, 1961 - Penalty - For late filing of return - Assessment year 1971-72 - Whether application for extension of time for filing of return made after expiry of due date is valid in law - Held, yes - Whether where no communication is addressed either accepting or rejecting application within reasonable time by ITO, then assessee is justified in presuming that extension applications filed by him were duly granted by ITO - Held, yes - Whether it is necessary for assessee to state all matters in its explanation and absence of one or more causes in its explanation would mean that such cause did not exist at all - Held, no FACTS For the assessment year 1971 -72, notice under section 139(2) was served on the assessee on 11-5-1971 and the return was due to be filed on or before 10-6-1971. The assessee sought extension of time for filing of returns by filing applications dated 27-9-1971, 28-3-1972, 19-9-1972, 28-4-1973 and 30-9-1973 up to 30-12-1971, 30-6-1972, 31-10-1972, 30-9-1973 and 15-11-1973, respectively. The extension applications were made by the assessee much after the expiry of due date and after the expiry of the dates for which extension was sought by the assessee under various applications. The assessee filed the return on 13-2-1974. The ITO initiated penalty proceedings under section 271(1)(a) for late filing of return by 32 months. The ITO did not pass any order qua applications. On appeal, the IAC reversed the order of the ITO. On further appeal, the Tribunal upheld the order of the AAC and also allowed the assessee's plea that since no reply to the extension applications had been conveyed, his applications stood sanctioned by the ITO. HELD In view of Karam Singh v. CIT [1977] 110 ITR 726 ( Punj. & Har.), applications for extension of time for filing returns can be made even after the expiry of the prescribed period. The ITO is under an obligation in law to either grant or reject the applications for extension of time for filing of the return and such an order if passed should be conveyed to the assessee. Further, it has been held in Karam Singh v. CIT [1977] 110 ITR 726 (Punj. & Har.),Harmanjit Trust v. CIT…

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