1978 (7) TMI 178

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....7,764. Rejecting the explanation offered by the assessee for the penalty aforesaid under s. 271(1)(c) of the Act. On appeal the AAC concurred with the ITO that penalty was exigible. He, however, directed the ITO to recalculate the penalty on the basis of the reduction allowed by the Tribunal in appeal. Before us the learned representative for the assessee referred to the provisions of s. 271(3)(a) and pointed out that as per the return of income voluntarily filed, its income was only Rs. 10,764 and that the maximum amount not chargeable to income-tax in its case was Rs. 10,000. He urged that in so far as its income was less than the amount prescribed under s. 271(3)(a) no penalty could be levied. On behalf of the Revenue the learned departm....

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.... failure to furnish the return of his total income under sub-s. (1) of 139 shall be imposed under sub-s. (1) on an assessee whose total income does not exceed the maximum amount not chargeable to tax in his case by one thousand five hundred rupees." In the assessee's case the maximum amount not chargeable to tax was Rs. 10,000. Unless the assessee's income exceeded Rs. 11,500, no penalty is leviable as per the above provision. Under/s. 139(1) of the Act an assessee is liable to furnish his return of income showing his total income if it exceeded the maximum amount not chargeable to income-tax. The assessee could naturally show only the income that was earned by him. He cannot anticipate the additions which the ITO would make while making....

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....ase while the assessee showed its total income at a figure less than the taxable limit for a registered firm of Rs. 25,000 its total income came to be assessed at a higher figure due to certain additions made in the trading account and also for certain cash credits which the assessee could not prove the Tribunal found that when the returns were filed by the assessee, according to the assessee, its income was below the taxable limit and a that being so the assessee had no obligation to submit the return under s. 139 of the Act. The Tribunal, therefore, held that there could be no question of delay in filing the return and on that ground the Tribunal upheld the order of the AAC cancelling the penalty, though on a ground different from that of....