Law: Income Tax Act, 1961

Section: 162,271

(a) Income-tax----Penalty---Representative assessee---Minor---Failure of guardian to file return on time---Notice issued to guardian and guardian given opportunity to be heard---Penalty could be imposed on guardian---Indian Income Tax Act, 1961, Ss. 162 & 271. (b) Income-tax----Reference---Penalty---Question whether Tribunal was justified in cancelling penalty---Question covered aspect whether interpretation of order of I.T.O. by Tribunal was correct---Indian Income Tax Act, 1961, S.256. The guardian of a minor who pays the tax on behalf of the minor is entitled to recover the same from the estate of the minor. Section 162 of the Income Tax Act, 1961, says that any sum paid by the guardian on behalf of the minor is recoverable by the guardian from the minors estate. Even assuming that the guardian is not entitled to recover the penalty paid under section 271(1)(a) of the Act from the minors estate, that would not mean that no penalty is imposable on the guardian for the delay in filing the returns for the minor. The Income-tax Officer found that for the assessment years 1972-73 to 1974-75, there was a delay in filing the returns of the minor, S. He, therefore, issued notice on the guardian of S and after hearing him, held that there was no satisfactory explanation for the delay and imposed penalty under section 271(1)(a); The Tribunal found that there was no reasonable cause for not filing the returns and that the delay was due to the negligence on the part of the father of the minor and for the delay penalty under section 271(1)(a) was imposable. But, according to the Tribunal, the penalties imposed were unsustainable for two reasons, namely, (1) in the order levying penalties, the minor was shown as the assessee and, therefore, the penalty was imposed on the minor, which was illegal and the separate identity of the minor son and the father who was the guardian were not given distinctly and (2) even if penalty was imposable on the father, who was the guardian of the minor, no reasonable opportunity was given to him. On a reference: Held, that a plain reading of the order imposing penalty would show that the penalties were levied on the father of the minor…

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