INCOME-TAX OFFICER Vs. JANGI LAL

JUDGEMENT

(1.) The only contention in this appeal is that the Commissioner (Appeals) had erred in cancelling the penalty of Rs. 1,64,268 levied by the ITO under section 271(1)(a) of the Income-tax Act, 1961 (the Act).

(2.) A search was conducted at the premises of the HUF of Shri Jangi Lal on 9-10-1974. A return was subsequently filed by this HUF. An assessment was also made on it in the status of HUF on 31-5-1978 on an income of Rs. 4,48,670. In appeal, relief was allowed by the Commissioner (Appeals) vide his order dated 18-1-1983 and he has finally reduced the taxable income to only Rs. 59,700.

(3.) The ITO also initiated penalty proceedings under various sections of the Act including section 271(1)(a) . A show-cause notice was issued to the assessee to which there was also a reply on 27-2-1981. It was stated in the said reply that the books of account and the details were seized by the department and, therefore, the assessee was not in a position to file the return of income until and unless those books were returned. The reply further states that it was after great efforts that a return of income was filed and, therefore, the delay in the submissions of the return was because of a reasonable cause. The ITO, however, rejected the explanation submitted by the assesee. He passed an order under section 271(1)(a) on 28-3-1981 levying a penalty of Rs. 1,64,268 on Shri Jangi Lal son of Shri Sita Ram of Jaunpur as an individual.