GANPATLAL N DALWADI Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS IT Reference arises under S. 256(2) of the IT Act, 1961, and that, also in compliance of this Court's order dt. 31st July, 1978.

(2.) THE question referred to us are as under :

(3.) AGGRIEVED by the said orders of penalty imposed by the ITO, the assessee had carried the matter in appeal before the AAC, who had by his order held that the burden of proving that the assessee was prevented by sufficient cause from filing the returns within the time was on assessee and that, the assessee had failed to discharge the said burden. However, it was held by him that, the penalties shall have to be related only to the tax payable on the total income finally determined in the assessee's case. He, therefore, had directed the ITO to scale down the penalties correspondingly. The matters were carried before the Tribunal by the assessee, and he had contended that his only source of income was the share income from the above said two partnership firms, and that, the said firms had filed their returns of income for the above said two years after the due date. It was argued on the basis of this fact that, there existed a reasonable cause which prevented the assessee from furnishing the returns of total income in time in respect of the above said two years. The Tribunal had taken the notice of the fact the assessee had admittedly not applied for extension of time for filing the returns and that, the assessee had failed to seek for the extension of time even after the receipt of the notices under S. 148 of the Act. It was also taken into consideration by the Tribunal that the returns were filed only on 31st March, 1971, and that, in past also the assessee had filed the returns of income for the asst. yrs. 1963 64, 1965 66 and 1966 67 late and that the assessee on that count had also suffered penalties for not filing returns in time for the asst. yrs. 1965 66 and 1966 67. The Tribunal had concluded that the assessee had failed to furnish the returns within time without a reasonable doubt. The Tribunal had examined the plea of the assessee that the above said partnership firms from which the assessee derived share income were late in filing their returns. Any how, the Tribunal had taken the view that merely because the firms in which the assessee was a partner had not made up their accounts was not per se a reasonable cause for not filing the return within the prescribed time. In the result, therefore, it was held by the Tribunal that no reasonable cause was established for the delay in filing the returns for the above said two years under consideration. In view of the above said conclusion, the appeals filed by the assessee came to be dismissed by the Tribunal by the orders dt. 19th Feb., 1977. As noticed above, ultimately in compliance of this Court's order dt. 31st July, 1978 the above said questions have been referred to this Court for answer and reply.