COMMISSIONER OF INCOME TAX Vs. BISWANATH GHOSH

JUDGEMENT

(1.) BEING called upon by this Court by order dt. 13th Aug., 1975 on an application made by the Revenue under S. 256 (2) of IT Act, of 1961 (hereinafter referred to as the 'Act'), the Tribunal, Cuttack Bench, has stated a case and referred the following question for opinion of the Court :-

(2.) THE relevant years of assessment are 1964-65, 1965-66 and 1966-67. Returns for the aforesaid years were due before 1st Oct., 1964, 1st Oct., 1965 and 1st Oct., 1966 respectively, Returns were, however, file on 14th Dec., 1969, 1st Sept., 1969 and 30th Sept., 1969 respectively for the aforesaid years. The ITO intimated proceedings under S. 271 (1) (a) of the Act,. called upon the assessee to show cause as to why penalty may not be levied and after rejecting the explanation furnished by the assessee imposed penalties of various amounts for the said years.

(3.) REVENUE appealed before the Tribunal and contended that merely because the books of account of the firm had not been closed before expiry of the statuary period no reasonable cause existed for the delay in filing of assessee's own returns. On the side of the assessee, it was contended that Nilamani Ghosh who was the Mangaing partner of the firm was lying seriously ill and ultimately succumbed to this illness on 14th Sept., 1967. He was in over all personal charge of the business and on account of his protracted illness the firms business activities had been tops turbid. It was further pointed out that Nilamani Ghosh was the major partner and assessee had very small interest. Therefore, assessee was not in position to control the activities and delinquencies of the firm. The Tribunal found the contentions of the assessee to be true as a fact. It was further found that there was no evidence to show that assessee had knowledge of the correct figures of his share income in the firm and therefore, was in a position to file returns of his income before being communicated the exact figures. These, in the opinion of the Tribunal justified cancellation of the penalty by the appellate Asst. CIT. Accordingly the appeal was dismissed and the order vacating imposition of penalty was sustained. Thereupon the Revenue moved the Tribunal to state a case and having failed made an application before this Court in the manner already indicated.