COMMISSIONER OF INCOME TAX Vs. SRINIVASAN R

JUDGEMENT

(1.) AS per the direction of this Court, the Tribunal referred the following common question for the opinion of this Court under S. 256(2) of the IT Act, 1961:

(2.) THE ITO found that for the asst. yrs. 1972 -73 to 1974 -75, the returns showing the income of minor R. Srinivasan -respondent herein were filed only on 17th Feb., 1975 even though they were due on 30th June of each of the assessment years. He, therefore, initiated penalty proceedings for the delay in filing the returns under S. 271(1)(a) and imposed penalty in the following terms:

(3.) THE Tribunal found that the excuse offered for the delay had no real nexus with the default and that in fact the guardian of the minor neglected to file the returns of the minor in time. The Tribunal found that the delay in filing the returns was without reasonable cause and wilful. The Tribunal then considered the question on whom the penalties should be imposed and concluded that in the case of a minor the IT Act (hereinafter referred to as "the Act") did not envisage that Items Assessment years . 1972 -73 1973 - 74 1974 -75 . Rs Rs Rs. Capital gains on sale of land 90,000 - - Dividends from Kasturi & Sons 41,472 73,100 1,10,132 Other items (Annuity), 950 950 950 the returns should be filed by the minor himself but only by the guardian. It was also found that the guardian of the minor was liable to assessment only in his representative capacity. Since it was the representative assessee who was bound to file the return under S. 139(1) of the Act, it was held that the penalty under S. 271(1)(a) of the Act can be imposed only upon him for breach of that obligation and that there being no obligation on the minor, there could be no penalty under s. 271(1)(a). It was further held that since the minor cannot be penalised and since S. 162 refers to only reimbursement of the taxes paid by the representative guardian, the guardian may not be liable to pay penalty as a representative for the minor. It was further found that the penalty was imposed without affording a reasonable opportunity in respect of independent liability. In that view, the penalties were cancelled.