1. At the instance of the revenue, the following question has been referred to us for our determination :
'Whether, on the facts and in the circumstances of the case, the penalty imposed on the assessee under section 271(1)(a) was legal ?'
2. Messrs. Vithaldas Jayawant, the assessee, is a partnership firm having its head office at Nagpur and branches at Mangalore, Cochin, etc. It keeps books of account according to the Diwali year and for the relevant assessment year 1963-64, the previous year ended on October 28, 1962. The return of the assessee ought to have been filed under section 139(1) of the Income-tax Act, 1961, latest by June 30, 1963. It is the case of the assessee that it filed on or about June 15, 1963, an application in Form No. 6 requesting for an extension of time for filing the return which was due on June 30, 1963. Ultimately, the assessee filed the return on March 30, 1964, disclosing an income of Rs. 1,08,696. The Income-tax Officer made an assessment under section 143(3) determining the tax payable by the assessee at tax payable by the assessee at Rs. 6,968 and levied interest in accordance with the proviso to section 139(1) in the sum of Rs. 2,535.
3. The Income-tax Officer also initiated proceedings for imposing a penalty under section 271(1)(a). The assessee objected to the imposition of the penalty taking the plea that an application for extension of time had been submitted to the Income-tax on or about June 15, 1963, as the account from the various branches had not been received and there was illness of the chief accountant. No evidence was produced in support of the contention that an application in Form No. 6 had been filed or that there was delay in receiving the accounts from the branches or about the illness of the chief accountant. The explanation given by the assessee was rejected by the Income-tax officer who imposed a penalty of Rs. 10,833 by his order dated February 3, 1970, under section 271(1)(a).
4. In an appeal by the assessee, the very same contentions were sought to be urged before the Appellate Assistant Commissioner, for explaining the cause of delay in filing the return. The Appellate Assistant commissioner carefully examined the records of the income-tax department and found that no application in Form No. 6, as alleged by the assessee, was on record; nor was any evidence produced a indicate that such an application was filed nor was a copy thereof produced before him.
5. In a second appeal before the Tribunal, the same grounds were urged. In the absence of any application or evidence to show that the accounts of the branches were not received or the failure to lead evidence about the sickness of the chief accountant, the order imposing penalty was confirmed by the Tribunal. It is from this order of the Tribunal that the above question has been referred for our determination.
6. Mr. Dewani on behalf of the assessee submitted that when penalty is imposed under section 271(1)(a), the onus is upon the department to show that the assessee failed to file the return within the time stipulated in clause (a) of section 271(1) and that such onus in the present case has not been discharged by the department. He, therefore, submitted that the taxing authorities and the Tribunal were in error in confirming the order imposing the penalty.
7. Without going into the question whether the burden lies upon the revenue or the assessee to show that there was no reasonable cause for failure to file the return, we will proceed in the present case to consider the question whether on the facts of the present case the order imposing penalty was justified. The relevant accounting year of the assessee ended on October 28, 1962. The return was required to be filed on June 30, 1963, while, in fact, it was filed on March 30, 1964. Thus, there cannot be any controversy that the assessee has failed to file the return within the time provided by section 139(1) of the Act. When notice was given to the assessee to show cause why the return was not filed within the prescribed period, it came out with an explanation that an application in Form No. 6 for extension of time to file the return was made and as a bona fide request was made for the extension of time, the penalty proceeding should be dropped. In the first place, it has been found as a fact not controverted by Mr. Dewani that in the records of the income-tax department there is no such application made for extension of time to file the return. The assessee failed to produce copy of any receipt acknowledging the receipt of such application by the department. He even failed to produce a copy of such application made for extension of time in Form No. 6 was made is only a got up one. Justification for making such an application as stated in the reply to the show-cause notice was that the accounts from the various branches were not received and the sickness of the chief accountant. No evidence whatsoever was produced by the assessee at any stage either before the taxing authorities or the Tribunal when such accounts were received from the various branches and what was the illness of the chief accountant. In fact, with the reply to the show-cause notice no particulars whatsoever were furnished. Such being the position, as admittedly the return, though required to be filed on June 30, 1963, was filed on March 30, 1964, the taxing authorities and the Tribunal were right in taking the view that there was no reasonable cause for the failure on the part of the assessee to file the return within the prescribed period. In that view of the matter, the order imposing the penalty was justified.
8. Accordingly, the question referred to us is answered in the affirmative and in favour of the revenue. The assessee shall pay the costs of the revenue.