RELEVANT PARAGRAPH
6.2 In the present case there has been admittedly a default in terms of s. 271F of the Act; the assessee’s legal ground, i.e., in respect of validity of its return, being of no consequence, in view of me. Clear mandate of the provision (s. 271F), as well as the decision by the Hon’ble Apex Court in the case of Prakash Nath Khanna (supra). Further, the assessee’s plea of there being no presumption in law that everyone knows the law, as held by the Apex Court in the case of Motilal Padampat Sugar Mills & Co. vs. State of Uttar Pradesh (1979) 118 ITR 326 (SC) would. In our view, be not applicable in the facts of its case. The assessee is a regular assessee for the past several years, who consciously prefers to file his personal returns of income under the Act at Mathura, his native place, even as he resides and pursues his vocation as a businessman, at Nasik. Under the auspices of a partnership firm thereat, as its sole working partner, which is subject to the Act, besides other Central & Provincial laws, so that he is only ably guided by counsels, and the relevant provision of law (s. 271F) is on the statute since 01/10/1998. Further, would that therefore imply that had he been aware of the provision of s. 27 IF. he would have filed the return in time or by the close of the assessment year”}, so that the said argument, even presuming his unawareness of the provision is self-defeating and contradicts his case of being prevented by reasonable cause in doing so. Also, his plea of there being no loss to the Revenue due to the delayed filing of return is also not valid, being not relevant for the purpose of levy of penalty u/s. 27IF.
6.3 The consideration of existence of mens rea is also absent for the purpose of levy of penalty u/s. 27 IF of the Act, even as clarified by the decisions of the Hon’ble High Courts, viz.. as listed at para 4.2(C) above, and which is only relevant, as a mere reading of the relevant provision would show, in the case of prosecution proceedings (s. 276CC). The said provision stipulates the “default’ (thereunder) as, among others, failure to furnish the return of income by the due date as specified u/s. 139(1), and which rather falls much before the close of the relevant assessment year.
6.4 As such, the only relevant consideration, which constitutes, to our mind, the basis of the assessee’s case is of the existence of a reasonable cause(s) under the facts and circumstances of its case, for the failure to furnish the return within the prescribed time, i.e., by the end of the relevant assessment year, or by 31/3/2004. As afore-stated, the penalty or its amount is independent of the extent of delay, i.e., beyond the close of the assessment year, or of the income returned or the admitted tax, where the return, as in the present case, is furnished subsequently, so that the considerations of compensation or loss to the Revenue are absent in the application of the Section, being suitably taken care of by the other provisions of the Act. The extent of delay, however, could be a relevant factor, impacting the case of an assessee on the ground(s) of reasonable cause(s), as any cause(s) advanced by it, if so, would have a time component associated therewith.
6.5 Coming to the facts of the present case, the assessee has explained that he was required to be at Nasik for the purpose of managing the affairs relating to the closure of the partnership business, due to the banning of its produces) by the Sate Government, and which was his prime responsibility as the sole working partner. And. in fact, the capital gains (Rs. 10.44 lacs) was only due to the sale of land to compensate or meet the financial loss suffered due to the closure of business, and the income from other sources (Rs.10,38 lacs) also stood earned only on account of the cancellation of the agreement to sell the land, and thus, both the incomes were incidental and related only to the steps required to be taken by him to reduce the loss and meet the liabilities existing or arising in wake of the closure of business, and which necessitated his staying at Nasik and prevented his coming back to Mathura, his parental home.
6.7 It is only the information along the foregoing lines which would form the edifice of, and establish, the assessee’s case of existence of reasonable cause, the onus to prove which is on him. This is ail the more so as, as evident, the closure of the business stood substantially completed prior to 31/3/2003, and all the relevant information required for the purpose of filing the return had crystallized by that date. As such, a further delay of 21 months; return having been filed on 31/12/2004, is not explained on the basis of the dislocation caused due to closure of the said business, even the date of which remains unspecified, and whereby the assessee has, suffered a financial loss of-Rs-.-2.-Q2 lacs. Even if-the assessee has remained at Nasik, searching for .alternate avenues of income, need for which is only understandable, though can only be taken into account where pleaded, that still would not explain the delay in its case.
7. Under the circumstances, and in our foregoing discussion of the factual and legal aspects of the case, we are of the view that the assessee has not been able to show, much less, prove, any reasonable cause(s) for not furnishing the return of income by 31/03/2004 and, thus, the levy is not saved by section 273B. As such, the impugned default can only be considered as a conscious disregard of one’s statutory obligations, and the penalty stands rightly levied, and is, therefore, upheld. We derive support in our said decision from the judgment of the Hon’ble Kerala High Court in the case of CIT v. Kerala Transport Co. (supra), as well as by the Hon’ble Apex Court in the case of Pradip Lamp Works v. CIT, 249 ITR 797 (SC) and Amin Chand Pyarelal v. IAC, 285 ITR 546 (SC).
