CIT Vs. MD EHTESAM

JUDGEMENT

(1.) THE point involved in all the cases under reference being the same, they have been heard together and are being disposed of accordingly.

(2.) THIS is reference under section 256(2) of the Income Tax Act, 1961 (hereinafter referred to as the Act) made by the Income Tax Appellate Tribunal, Patna Bench, Patna to answer the following question of the law. "Whether on the facts and in the circumstances of the case, the Tribunal was justified in confirming the order passed by the Appellate Assistant Commissioner holding that as the penalty was imposed on the firm for delay in filing the return, no penalty was leviable on the assessee, who was a partner of the firm under section 271 (1)(a) of the Income Tax Act, 196l."

(3.) BOTH the partners were also issued under section 148 of the Act. Neither they filed return of income nor did they apply for extension of time to file the return. Though one of the partners Md. Ezaz was given opportunity to take extracts of the seized papers, even then they did not file the return. Thereafter, the assessment proceedings were initiated against both the partners/opposite parties. Notice of show cause was issued under section 274 of the Act by the Income Tax Officer as to why penalty be not imposed as there was no reasonable cause for not filing the return within time. BOTH the partners appeared and filed their show cause and took three pleas for not leaving the penalty. The said pleas are as follows: