Income Tax Appellate Tribunal - Nagpur
Assistant Commissioner Of Income-Tax vs Smt. Anupama Gijre on 23 August, 1994
Equivalent citations: [1995]52ITD350(NAG)
ORDER
H.C. Shrivastava, Accountant Member
1. As both the appeals concern the same assessee and involve similar points, they are being disposed of together for the sake of convenience.
2. Though the notice of hearing was served on the assessee none attended on her behalf.
3. The facts of the case are as below:
(1) The returns of income were due to be filed for the years concerned by 31-7-1984 and 31-7-1985 respectively Under Section 139(1) of the Act.
(2) The returns of income could also be filed Under Section 139(4) of the Act till 31-3-1987 and 31-3-1988 respectively for the two years.
(3) A search and seizure proceeding was conducted at the premises of the assessee on 6-11-1986. There is nothing on record to establish that any money, bullion or jewellery was found at the premises. It is also notable that the returns of income for the years concerned in this case were not filed till 6-11-1986 i.e. the date of search.
(4) Nothing has been brought on our record regarding any proceedings conducted by the Department after 6-11-1986 and before 25-3-1987 when the returns for both the years were filed by the assessee disclosing incomes of Rs. 1,12,000/- and Rs. 1,25,000/-respectively.
(5) There is no evidence on record to prove that any proceedings Under Section 147 read with Section 148 of the Act were initiated against the assessee by the Assessing Officer for the two years concerned.
(6) The returns were, therefore, not filed Under Section 139(1) but Under Section 139(4) of the Act.
(7) The assessment order passed by the Assessing Officer mentions "Return of income was filed. In response to notice Under Section 143(2), Shri Narayan Demble, CA appeared. There was a search at the office and residential premises of the assessee. Certain documents were seized. The matter has been discussed with the assessee and her representative from time to time. After considering the position of the assets of the assessee as on 31-3-1984 and 31-3-1985, total income is computed as under :...".
The Assessing Officer computed the income at Rs. 1,12,600 as shown by the assessee for 1984-85 and with similar notings assessed the income of the assessee at Rs. 1,39,940 including interest income as shown by the assessee for 1985-86.
(8) No finding is recorded in the assessment order regarding the quantum of concealed income or regarding the furnishing of inaccurate particulars by the assessee in her return. Proceedings Under Section 271(1)(c) were, however, initiated.
4. In the penalty order the Assessing Officer observed as below :
It was obligatory on part of the assessee to file return of income before 31-7-84 but no return of income was filed on the said date. Proceedings Under Section 271(1)(c) were, therefore, initiated in view of the Explanation 5 to Section 271(1)(c) as the assessee deemed to have concealed the particulars of income or furnished inadequate particulars of such income.
The noting for assessment year 1985-86 is also similar except that instead of date of 31-7-84 the date 31-7-85 has been mentioned. The Assessing Officer, therefore, imposed penalties of Rs. 53,083 and Rs. 64,370 for both the years on the following grounds:
(1) That though the assessee had substantial income based in several investments on properties, FDRs etc. no return of income was filed even after expiry of due date for filing the return Under Section 139(1).
(2) The provisions of Explanation 5 to Section 271(1)(c) are applicable to the facts of the case.
5. When the matter was taken to the CIT (Appeals) he cancelled the penalties mainly on the ground that Explanation 5 to Section 271 (1)(c) was not applicable to the facts of the case as there was no specific seizures of any assets in the form of money, bullion, jewellery or other valuable articles or things. The Department is in appeal before us.
6. We have heard the Departmental Representative in detail and we have gone through the case records. As mentioned above the assessee was not present before us. We are of the opinion that the CIT(Appeals) was justified in canceling the penalties imposed for both the years. However, we are of the opinion that the penalties- imposed for both the years have to be cancelled not only on the ground that the Explanation 5 to Section 271 (1) (c) is not applicable to the facts of the case but also on the ground that Explanation 3 to Section 271 (1) (c) which has been applied by the Assessing Officer for imposing penalty is also not applicable to the facts of the case. The law had all along been that mere failure to file a return of income does not tantamount to concealment of particulars of income - S. Santhosa Nadar v. First Addl. ITO [1962] 46 ITR 411 (Mad.) and Narain Das Suraj Bhan v. CST[1968] 21 STC 104 (SC). With the introduction of Explanation 3 to Section 271 with effect from 1-4-1976 the position has changed. The cases covered under Explanation 3 (operative between 1-4-1976 and 31-3-89) are those, where :
(1) any person who has not been previously assessed, (2) fails without reasonable cause to furnish return of income for asst. year 74-75 or any years subsequent thereto within two years from the end of the assessment year concerned, (3) where no notice has been issued to him Under Section 139(2) or 148 till the expiry of the above two years period from the assessment year, and (4) the Assessing Officer or the first appellate authority, as the case may be, is satisfied that in respect of such assessment year such person had taxable income.
[Emphasis supplied]
7. In this case this assessee was not previously assessed. She, however, furnished the returns of income for the assessment years 1984-85 and 1985-86 on 25-3-1987 which is within two years from the end of the assessment years concerned. It is also established that no notices Under Section 139(2) or 148 were issued till the expiry of the above two years period. No satisfaction of either the Assessing Officer or the first appellate authority has been recorded on the ground that this assessee had taxable income. From the above discussion it is, therefore, obvious that Explanation 3 to Section 271(1)(c) is not applicable and the Assessing Officer could not assume the jurisdiction for initiation of penalty proceedings as the returns of income filed by the assessee were within the time limit prescribed Under Section 139(4) and the returns filed by the assessee were accepted into by the Assessing Officer. We are, therefore, of the opinion that neither Explanation 3 to Section 271 (1)(c) nor Explanation 5 to Section 271 (1)(c) are applicable to the facts of this case. Accordingly, we cancel the penalties imposed for both the years.
8. In the result, the departmental appeals are dismissed.