2010 (12) TMI 950

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....and Shri Jagan Nath Seth were partners in a firm M/s Jagan Nath and Co. A search was carried in the premises of the said firm on 17th November, 1992 and some assets and documents were seized. On the basis of seized materials, the assessments were made in the case of the firm and in the case of the partners also. Thereafter, penalty proceedings were initiated against aforestated four partners for non filing of the return, under Section 271 (1) (a) of the Act. In response to the show cause notices, the assessees submitted that they could not file the return as the assessment of the firm was not finalized. It was further pleaded that they were under the impression that their income are below the taxable limit. Plea that no penalty could be lev....

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....sel for the department.   A bare perusal of the order of the Tribunal would show that the Tribunal by the order under appeal has found the explanation furnished by the assessees as sufficient.   The Tribunal has placed reliance upon a judgment of this Court in Additional Commissioner of Income-tax, Lucknow vs. Smt. Triveni Devi, (1974) 97 ITR, 390, wherein this Court has held that when a penalty has been levied on the firm for non filing of the return, no penalty could be levied on the partners. However, learned counsel submits that in view of the following decisions, the order of the Tribunal cannot be allowed to be sustained:   1. Outdoor Publicity vs. Commissioner of Income-tax and another (1999) 237 ITR 401. &nbs....

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....alization of firm's account, was held sufficient. The judgment of this Court in the case of Additional Commissioner of Incometax, Lucknow vs. Smt. Triveni Devi (supra) besides the other cases, have been relied upon.   In Commissioner of Income-Tax M.P. v. Shri Krishandad Agarwal and others, (1983) 143 ITR 798, a Division Bench of Madhya Pradesh High Court has held that under Section 271 of the Income Tax Act, the authorities have discretion to impose or not impose penalty. If is it found that there is only a technical or venial breach of the law or that it would be unjust to impose penalty, the authorities may exercise their discretion in favour of the assessee by not imposing penalty.   In Commissioner of Income Tax vs. Md.....