COMMISSIONER OF INCOME TAX vs. M/S. KASHIRAM OMPRAKASH

ITR/48/1992HC GujaratGJHC24015399199227 December 2004Author: HONOURABLE MR. JUSTICE D.A.MEHTA,HONOURABLE MS. JUSTICE HARSHA DEVANI4 pages
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What were the facts?

The Commissioner of Income Tax (Revenue) is the applicant, and M/s. Kashiram Omprakash (Assessee) is the respondent. The case concerns Assessment Year 1979-80. The assessee's return of income was due on July 30, 1979, but was filed on December 30, 1980. The Assessing Officer (I.T.O.) levied a penalty of Rs. 15,136 under Section 271(1)(a) of the Income Tax Act, 1961, rejecting the assessee's explanation for the delay. The Commissioner of Income Tax (Appeals) cancelled this penalty. The Income Tax Appellate Tribunal (Tribunal) confirmed the order of the CIT(A). The Revenue has referred questions of law to the High Court. A separate reference by the assessee pertains to Assessment Year 1978-79.

What did the High Court hold?

The High Court held that the Tribunal's order was not infirm. The Tribunal, after appreciating the evidence and considering the facts, concluded that the assessee's conduct was not contumacious and did not involve mens rea. This implies the Tribunal found that the assessee was prevented by a reasonable cause from furnishing the return by the due date. Therefore, the questions referred by the Revenue were answered in the affirmative, meaning in favour of the assessee and against the Revenue. The reference at the instance of the assessee for Assessment Year 1978-79 was left unanswered and returned as such because the assessee was neither present nor represented when the matter was called out. Both references were disposed of accordingly.

What were the issues?

The Tribunal had to decide the following questions referred by the Revenue for Assessment Year 1979-80: 1. Whether the Tribunal was right in law and on facts in cancelling the penalty levied by the I.T.O. under Section 271(1)(a) amounting to Rs. 15,136? 2. Whether the Tribunal was right in law and on facts in concluding that the assessee's conduct was not contumacious or did not involve mens rea? The Revenue argued that the Tribunal erred in cancelling the penalty. The Assessee's contentions, as reflected in the questions referred at its instance (though not argued due to absence), were: 1. Whether the Tribunal was justified in holding that penalty under Section 271(1)(a) was leviable, reversing the CIT(A)'s decision? 2. Whether the Tribunal was justified in holding the explanation for delay without substance, especially when a similar question for A.Y. 1976-77 & 1977-78 was decided in its favour? 3. Whether the Tribunal had material to hold that the levy of penalty was justified? 4. If penalty was justified, whether the Tribunal was right in upholding the period of delay as determined by the I.T.O.?

Which sections of the Income-tax Act were involved?

Section 271(1)(a),Section 256(1)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 48 of 1992

For Approval and Signature:

HON'BLE MR.JUSTICE D.A.MEHTA and HON'BLE MS.JUSTICE H.N.DEVANI

============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements?

2.

To be referred to the Reporter or not? : NO 3. Whether Their Lordships wish to see the fair copy : NO of the judgement?

4.

Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder?

5.

Whether it is to be circulated to the concerned : NO

The order continues below.

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