TaxTMI 
TaxTMI 
1984 (12) TMI 1
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....arging of interest indicated that the Income-tax Officer was satisfied that there was sufficient cause for delay in filing the return of income ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in cancelling the penalties levied under section 271(1)(a) ? The respondent-assessee is a partner in the firm, M/s. Manik Rao & Brothers. He filed voluntary returns for the assessment years 1959-60, 1960-61, 1961-62 and 1962-63 all on August 2, 1963. The return for the assessment year 1963-64 was filed on August 2, 1964. On account of the delay in filing the returns, the ITO treated the assessee as being in default and imposed penalties under cl. (a) of sub-s. (1) of s. 271 of the Act. In appeal before the ....
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....manner. The Appellate Tribunal allowed the appeals and cancelled the penalties. At the instance of the Commissioner of Income-tax, the Appellate Tribunal made a reference to the High Court of Andhra Pradesh. The High Court held that the Appellate Tribunal was justified in relying upon the presumption that official acts had been regularly performed, and that, therefore, it must be presumed that the ITO had extended the time upon grounds made out by the assessee, because otherwise the ITO could not have charged interest. Holding that no penalty was leviable in the circumstances, the High Court answered the reference in favour of the assessee. To appreciate the true scope of the questions referred, it is necessary to understand the scheme en....
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....n furnished under sub-s. (2) of s. 139, the ITO has power to extend the date for furnishing the return subject to payment of interest in the circumstances set forth in relation to voluntary returns under sub-s. (1) of s. 139. Where, however, the assessee does not furnish a return within the time allowed to him under sub-s. (1) or sub-s. (2) of s. 139, then before any assessment is made, he may, under sub-s. (4) of s. 139, furnish a return for any previous year at any time before the end of four assessment years from the end of the assessment year to which the return relates, and, in that event, the provisions of cl. (iii) of the proviso to sub-s. (1) of s. 139 relating to payment of interest would apply to the case. Sub-s. (8) of s. 139 was....
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.... any person referred to in clause (b), up to a period not extending beyond the 30th day of September of the assessment year without charging any interest; (ii) in the case of any person whose total income includes any income from business or profession the previous year in respect of which expired after the 31st day of December of the year immediately preceding the assessment year, up to the 31st day of December of the assessment year without charging any interest; and (iii) up to any period falling beyond the dates mentioned in clauses (i) and (ii), in which case, interest at nine per cent. per annum shall be payable from the 1st day of October or the 1st day of January, as the case may be, of the assessment year to the date of the furni....
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....unsel, however, has not been able to satisfy us why the presumption raised by the Appellate Tribunal, and endorsed by the High Court, should not prevail. It cannot be disputed that the ITO could extend the date for furnishing the return in respect of each assessment year. It was open to him to do so under the statute and he was entitled to charge interest only on the basis that the extended period fell beyond September 30, or December 31, as the case may be. In the ordinary course of things, the ITO could have extended the date only upon being satisfied that there was good reason for doing so, and that would have been on the grounds pleaded by the assessee. We consider that in the circumstances of this case a presumption could validly be ra....
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.....T. Act, 1922. They were not returns furnished within the time allowed by or under sub-s. (1) or sub-s. (2) of s. 22 of that Act. Accordingly, that case also need not be considered. In the result, we uphold the answer returned by the High Court to the first question raised in the reference. The second question raises the point whether the Appellate Tribunal was justified in cancelling the penalties levied under cl. (a) of sub-s. (1) of s. 271. That provision reads : " 271. (1) If the Income-tax Officer or the Appellate Assistant Commissioner in the course of any proceedings under this Act, is satisfied that any person (a) has without reasonable cause failed to furnish the return of total income which he was required to furnish under sub....