Law: Income Tax Act, 1961

Section: 271

Income-tax----Penalty---Delay in submission of returns---Show-cause notice issued by ITO ---Failure by assessee to give reasons---Tribunal justified in confirming amount of penalty levied tinder S.271(1)(a)---Indian Income Tax Act, 1961, S.271(1)(a). The assessee was a partnership firm The return of the assessee pertaining to the assessment year 1964-65 was due on June 30,.1964. The assessee submitted the return on June 30, 1965. The Income-tax Officer issued show-cause notice for imposition of penalty under section 271(1)(4) of the Income Tax Act, 1961, to which the assessee did not submit any explanation. The Income-tax Officer levied a penalty of Rs.47,808 at the rate of 2 per cent. of the net tax payable for every month of default in furnishing the return in time under section 271(1)(4) read with section 271(2). On appeal, the Appellate Assistant Commissioner recalculated the penalty and reduced the quantum of penalty to Rs.40,764. On further appeal to the Tribunal, the assessee contended that the difference between the tax assessed and advance tax paid being about Rs.2,597 only, no penalty ought to ,have been imposed. The Tribunal dismissed the appeal of the assessee. On a reference: Held, that it was clear from the order of the Tribunal that the assessee did not submit any explanation whatsoever about a reasonable cause for the delay of 12 months in submission of the return. Therefore, the Tribunal was justified on the facts and circumstances of the case in coming to the conclusion that the provisions of section 271(1)(4), were attracted to the case of the assessee. CIT v. Vegetable Products Ltd. (1971) 80 ITR 14 (Cal.) Jan Bombay Pipe Traders v. CIT (1995) 79 Taxman 363 (Bom.) ref. JUDGMENT Dr. B.P. SARAF, J.---By this reference under section 256(1) of the Income Tax Act, 1961, the Income-tax Appellate Tribunal has referred the following question of law to this Court for opinion at the instance of the assessee: "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in confirming the amount of penalty of Rs.40,764 levied under section 271(1)(4)/271(2) of the Income Tax Act, 1961, when the firm had paid Rs.29,357 as…

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