COMMISSIONER OF INCOME TAX Vs. CHANDER PRAKASH

JUDGEMENT

(1.) Under Section 256(2) of the Income-tax Act, 1961, the Tribunal has stated the following two questions :

(2.) The assessee is an individual. For the assessment years 1970-71 and 1971-72, returns had to be filed on or before September 30, 1970, and September 30, 1971, respectively. They were, however, actually filed on September, 5, 1973. For this delayed filing of returns, penalty proceedings were taken under Section 271(1)(a) of the Income-tax Act. Penalties were, accordingly, levied by the Income-tax Officer, and they were confirmed in appeal. On further appeal, however, the Tribunal deleted the penalties whereupon the Revenue obtained this reference.

(3.) From the order of the Tribunal, it appears that on August 29, 1973, there was a settlement which is evident from the order of the Commissioner of Income-tax dated August 29, 1973. The order states that the assessee offered to accept the income of Rs. 90,000 spread over four years equally, i.e., over the years 1973-74, 1972-73, 1971-72 and 1970-71. Evidently, in pursuance of this settlement, he filed returns a week later. The Tribunal was of the opinion that the assessee was under a bona fide belief that his income was not above the taxable limit and the fact that he agreed to a settlement is not indicative of any wilfulness on his part. We cannot say that the view taken by the Tribunal is unreasonable. With a view to buy peace, the assessee may have agreed to file the return showing an income of Rs. 22,500 though his income, in reality, may be below the taxable limit.