COMMISSIONER OF INCOME TAX Vs. KANUBHAI MULJIBHAI PATEL

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal, Ahmedabad Bench "a" has referred the following question under Section 256 (2) of the Income-tax Act, 1961, at the instance of the Commissioner of Income-tax, Baroda:

(2.) THE Assessment Year is 1979-80 and the relevant accounting period is S. Y. 2034. The due date of filing of Return of Income was 31. 07. 1979. The assessee, a Hindu Undivided Family, filed return of income on 23. 03. 1982 declaring NIL income. In the statement, accompanying to Return of Income, the assessee had shown the amount received on sale of agricultural land as exempt in view of the decision of Bombay High Court in the case of Manubhai A. Sheth and Ors. Vs. N. D. Nirgudkar, 2nd Income-tax Officer, A-II, Ward, Bombay and Ors. ,[1981] 128 ITR 87.

(3.) AS the Return of Income had been filed belatedly, the Assessing Officer initiated penalty proceedings under Section 271 (1) (a) of the Act and ultimately levied penalty of Rs. 32,130/- for a delay of 32 months in filing the Return of Income. The assessee did not succeed in appeal before the Commissioner (Appeals ). However, in second appeal before the Tribunal, the explanation tendered by the assessee was accepted and the Tribunal held that the assessee was not prevented by reasonable cause for the period up to August 1980 and thus reduced the period of default to 12 months.