1975 (9) TMI 37

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.... the Income-tax Act of 1961 ?" The assessee is a firm. The relevant years of assessment are 1963-64, 1964-65 and 1965-66. The assessee was required to file its return of income under section 139(1) of the Act for these assessment years by June 30, 1963, June 30, 1964, and June 30, 1965, respectively. As a fact, however, the assessee filed returns for all the three years on December 27, 1966. The Income-tax Officer found that there had been default in filing of the returns and accordingly initiated penalty proceedings under section 271(1)(a) of the Act and imposed penalties of varying amounts for these years. The explanation given by the assessee before the Income-tax Officer was that its books of account were seized by the sales tax a....

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....fficulty in preparation of the trading account, profit and loss account, etc., for the three years under present consideration merely because the books of account for the earlier years were seized by the sales tax department. Secondly, when according to the appellant's own submission, the returns of income were getting delayed, the appellant should have requested the concerned sales tax authorities as well as the Income-tax Officer and should have brought to their notice that for no fault of the assessee the returns of income were getting delayed. By making such request the appellant could have had access to his own books of account when they remained in the custody of the sales tax authorities. There is, however, no evidence to show that a....

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.... whether there was a reasonable explanation before the taxing authorities and as a proposition of law as to whether penalty could be levied. On both the scores, it found in favour of the assessee and accordingly directed deletion of the penalties. We have little doubt, in view of the legal position indicated by a Full Bench of this court in the case of Commissioner of Income-tax v. Gangaram Chapolia, that the view taken by the Appellate Tribunal on the legal aspect is erroneous. Undoubtedly, it was for the assessee to show reasonable cause for the delay in complying with the statutory requirement of making a return of the income within the time specified. What the extent of that burden is need not be considered here, but the Tribunal was....