1985 (12) TMI 7

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.... delivered by J. S. VERMA, Actg. C.J.-This is a reference under section 256(1) of the Income-tax Act, 1961, at the instance of the Revenue to decide the following questions of law: " (1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in setting aside the penalty imposed under section 271(1)(a) of the Income-tax Act for an apparent mistake of ....

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....ufficient cause to explain the delay in filing the return on account of the fact that the assessee entertained a bona fide impression that no return was required to be filed because it had suffered losses in the earlier two years which had to be carried forward during the relevant assessment year. It was also contended by the assessee that the Income-tax Officer's calculation of the period of dela....

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....ustified. The question now is of the course to be adopted by us while disposing of this reference. It is clear that the assessee's contention of existence of sufficient cause to explain the delay in filing the return is also required to be considered and decided by the Tribunal on merits before deciding the question of penalty finally in appeal before it. This not having been done by the Tribun....