RAMLAL RAMGOPAL AGARWAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference under Section 256(1) of the I.T. Act, 1961 (hereinafter called "the Act"), made at the instance of the assessee by the Income-tax Appellate Tribunal, Nagpur Bench, Nagpur, to answer certain questions said to arise out of the Tribunal's order dated April 20, 1972, in ITA No. 256 (Nag.)/69-70. These questions are the following, viz:

(2.) THE assessee is a partnership firm carrying on business under the name and style of "M/s. Ramlal Ramgopal Agarwal" at Raipur and it consists of two partners, viz., Ramnarain Agarwal and Ramlal Agarwal. THE relevant assessment year is 1963-64, for which the accounting period ended on Diwali, 1962. THE assessee-firm should have filed the return of its income showing a total income of Rs. 30,919 on or before June 30, 1963, in accordance with the provisions of Sub-section(1) of Section 139 of the Act, but thesame was filed only on December 1, 1964. THE ITO made the assessment by his order dated March 19, 1968, and required the assessee-firm to pay interest amounting to Rs. 670 in accordance with Sub-clause (iii) of the proviso to sub-s. (1) of Section 139, as it then stood, on account of the delay in filing the return. In addition to requiring the assessee-firm to pay interest in this manner for late filing of the return, the ITO also initiated proceedings for the imposition of penalty under Section 271(1)(a)of the Act. Rejecting the explanation given by the assessee-firm for the delay in filing its return, the ITO imposed a penalty of Rs. 2,900 on the assessee-firm under Section 271)l)(a) by his order dated January 7, 1970.

(3.) THE aforesaid third question may be disposed of at the very outset for the simple reason that it does not arise out of the Tribunal's order on account of which it should not have been referred to this court for decision. In the statement of case, it has been expressly stated that no attempt was made on behalf of the assessee-firm at the time of the hearing of the appeal before the Tribunal, to explain the delay in filing the return on the ground of existence of a reasonable cause for the same. That being so, the Tribunal itself was not called upon to decide the question whether there existed a reasonable cause to explain the delay on account of which penalty may not be imposed on the assessee-firm. THEre can be no dispute that the ITO does have the discretion not to jmpose any penalty if it is shown to his satisfaction that there was a reasonable cause to explain the delay in filing the return. Obviously, in the present case, the ITO rejected the assessee's explanation for the delay holding that the delay in filing the return was without a reasonable cause. This finding of the ITO was upheld by the AAC and no attempt was made to challenge the same before the Tribunal. THE aforesaid question No. (3), therefore, does not arise for decision in the present case. We, accordingly, decline to answer the same.