COMMISSIONER OF INCOME-TAX Vs. KAIJA KARINA TOOR

JUDGEMENT

(1.) This order shall dispose of seven appeals filed by the Revenue against the same assessee-respondent but in respect of different assessment years, namely, 1982-83 to 1988-89. All these appeals filed under Section 260A of the Income-tax Act, 1961 (for brevity "the Act") are directed against common order dated March 13, 2008, passed in I.T.A. Nos. 1034 to 1040/Chandi/2007 pertaining to the assessment years 1982-83 to 1988-89 by the Income-tax Appellate Tribunal, Chandigarh (for short "the Tribunal"). The Revenue has claimed that from the order of the Tribunal the following substantial questions of law would arise for determination of this Court:

(2.) It is pertinent to mention that the predecessor in interest of the assessee-respondent had failed to file return and on his death in an accident the assessee-respondent had filed the return. Thus, the question raised by the Revenue before the Commissioner of Income-tax (Appeals) was concerning imposition of penalty under Section 140A(3) of the Act. The Commissioner of Income-tax (Appeals) recorded a finding of fact that the assessment has been completed by the Assessing Officer in respect of the legal heir of the deceased, who was a widow of more than 65 years of age and resided abroad in Canada with her children. The assessee's accounts were under attachment by the court as also by the tax authorities later. Another finding of fact recorded is that amount under attachment in the bank with date of filing of the return was much more than the amount of tax assessed. It was later on appropriated by the Department pursuant to the directions issued by the High Court when the order of attachment was vacated and in fact a demand was raised by the Department pursuant to order under Section 143(3) of the Act. On the basis of the findings of fact, the Commissioner of Income-tax (Appeals) expressed the opinion that the year wise self-assessment tax was already recovered by the Department and the contention of the assessee was duly manifested while filing return of income with request to adjust tax as assessed out of attached bank account, therefore, it was concluded by the Commissioner of Income-tax (Appeals) that the delay in recovery of self-assessment tax cannot be imputed to assessee-legal heir. There was reasonable hardship and reasonable cause for not paying the self-assessment tax at the time of filing of return. Accordingly, the penalties under Section 140A(3) of the Act were directed to be deleted by the Commissioner of Income-tax (Appeals).

(3.) The Revenue approached the Tribunal and after hearing counsel for the parties, the Tribunal observed that the penal action contemplated by Section 140A(3) of the Act comes into operation when the assessee commits any default in making payment of tax in terms of Section 140A(1) of the Act. The Tribunal has concluded that the question of non-payment of tax on time stems from a reasonable cause or not, is necessarily a question of fact. The Tribunal proceeded to examine the question whether the finding of fact recorded by the Commissioner of Income-tax (Appeals) was based on material or not or whether such finding could be regarded as perverse. The answer given by the Tribunal to the aforesaid issue reads thus: