LAWS(MAD)-1976-3-46

S LOONKARAN Vs. COMMISSIONER OF INCOME TAX

Decided On March 24, 1976
S. LOONKARAN AND SONS Appellant
V/S
COMMISSIONER OF INCOME TAX Respondents

JUDGEMENT

(1.) THE assessee is a registered firm consisting of six partners. THE senior-most partner was one Loonkaran aged about 65 years in the year under consideration. It appears that he was generally not keeping good health. His eldest son, Moolchand, who was also a partner was normally attending to the income-tax assessment of the firm. For the assessment year 1963-64, the previous year ended on Diwali day in the month of November, 1962. THE Income-tax Officer and the Tribunal have stated that the return in such a case was due on 30th September, 1963. On 13th August, 1963, the Income-tax Officer issued a notice under section 139(2) of the Income-tax Act, 1961 (hereinafter referred to as "the Act") and the notice was received by the assessee on 20th August, 1963.

(2.) THE return was due under the said notice by 24th September, 1963. Moolchand suffered from an attack of jaundice some time in 1963. THE return had not been filed even in August, 1964. THErefore, the Income-tax Officer issued a notice calling upon the assessee to produce its books of accounts on August 17, 1964. At that time it was stated that Moolchand was unwell for more than 6 months and had not been completely cured at the time of writing and that the doctor had advised him to take rest for another three months. It was pointed out that it would not be possible to file the return and that three months' time might be given for filing the return. THE extension of time for filing the return was not granted by the Income-tax Officer. On 5th March, 1965, the Income-tax Officer issued a notice calling upon the assessee to show cause why a penalty should not be imposed under section 271(1)(a) of the Act THE assessee, on receipt of this, filed the return on 19th March, 1965. It was assessed on a total income of Rs. 51, 158 by assessment order dated 31st March, 1965. It was stated before us that the assessment as made was substantially on the basis of the return In the case of Moolchand himself, the Income-tax Officer had initiated proceedings for levy of penalty under section 271(1)(a) of the Act for his failure to submit the return within the time allowed under the law. THEse penalty proceedings were not pursued presumably because the Income-tax Officer was satisfied about his illness and his consequent inability to attend to the income-tax mattersIn the course of the penalty proceedings the assessee explained that Moolchand was in charge of the accounts and tax matters, that he was suffering from jaundice, that he was under treatment for six months and was otherwise unfit for a further period of six months, that Loonkaran was also not keeping good health and that the other partners were busy in the shop for more than the working hours due to the retail nature of the work.