1982 (7) TMI 196 - AT - Income Tax

Penalty Reduced on Appeal for Late Income Tax Return Submission

The appeal was partly allowed, and the penalty imposed under section 271(1)(A) for failure to submit the return of income within the allowed time for the ... - Issues:Levy of penalty under section 271(1)(A) for failure to submit the return of income within the allowed time for the assessment year 1970-71.Analysis:The appeal was filed by the assessee objecting to the penalty of Rs. 2,227 imposed under section 271(1)(A) for not submitting the return of income within the specified time for the assessment year 1970-71. The assessee had received notices under sections 148 and 142(1) of the Income Tax Act but failed to comply with them. The assessment was completed ex parte under section 144 based on an estimated income of Rs. 25,000. The penalty was imposed for a period of six years and seven months. The assessee claimed to have filed a petition under section 146 for reopening the assessment, which had not been disposed of by the Income Tax Officer (ITO). The Appellate Authority Commissioner (AAC) upheld the penalty citing lack of evidence regarding the filing of the return despite the notices issued. The Tribunal noted discrepancies in the records and orders of the departmental authorities regarding the imposition of the penalty. The representative of the assessee requested a reduction in the penalty based on the extended time given by the ITO to file the return. The Tribunal found it fair to sustain the penalty for only one completed month between the date allowed to file the return and the date of assessment, thereby reducing the penalty amount. The appeal was partly allowed, and the penalty was reduced accordingly.