1. This appeal is filed by the assessee against penalty order under Section 271(1)(c) of the IT Act, 1961 and the relevant assessment year involved is 1984-85.
2. The brief facts of the case are that the assessee is a private limited company and the previous year relevant to the asst. yr. 1984-85 ended on 31st March, 1984. Return of income was due to be filed on or before 30th July, 1984. Ultimately the assessee filed return of income on 25th April, 1985. The AO initiated penal proceedings under Section 274 r/w Section 271(1)(c) of the Act, 1961, in reply to which it was stated that extension of time for submission of return of income was prayed for upto 3rd Dec., 1984, Due to paucity of fund or payment of tax under Section 140A of the Act, return could not be submitted in time. The AO has stated that no such application for extention of time was submitted. He also found that the assessee had sufficient cash in hand, bank, etc. balances amounting to about Rs. 43-1/2 lakhs as on 31st March, 1984. He, therefore, did not accept the explanation and a penalty of Rs. 28,404 being penalty leviable @ 2 per cent of the tax payable for 9 months' delay was imposed.
3. The assessee filed on appeal before the CIT(A). The explanation furnished before the AO was reiterated. The authorised representative of the assessee produced a receipt in support of the claim that Form No. 6 praying for extention of time for submission of return of income was filed before the ITO, C-Ward, Dibmgarh, on 1st Aug., 1984. It was also stated that late filing of return for the immediate preceding assessment year had also effected filing of the return in respect of the present assessment year. The assesses also faced financial difficulties to pay self-assessment tax. It was contended that the delay was due to sufficient and reasonable cause. The CIT(A) considered the submissions and the order of the AO. Accepting the claim of the assessee to have filed Form No. 6 praying for extension of time till 31st Dec., 1984, he has directed the AO to work out the quantum of penalty from 1st Jan., 1985, till 24th April, 1985, and to modify the penalty accordingly.
4. Being still aggrieved, the assessee come up in appeal before the Tribunal. Shri Sampat Kumar Jain, the learned counsel of the assessee, reiterated the facts of the case and the submissions made before the authorities below. The learned counsel has also filed a paper book containing 11 pages in support of his argument. It is submitted that for this very default, interest under Section 139(8) of the Act amounting to Rs. 14,991 was waived by holding that the assessee was prevented by reasonable cause from filing the return of income. It was also submitted that interest under Section 217 and penalty under Section 273 were also waived by the AO under Rule 40 of the IT Rules by holding that there was reasonable cause. Copies of the order of the AO was filed at p. 3 of the paper book. The learned counsel has also in support of his submission relied on the decision of the Tribunal, Bombay Bench 'A' in the case of JTO v. Yusuf Abdulla Patel in (1985) 22 TTJ (Bom) 47 and the decision of the Tribunal, Delhi Bench, in the case of Maj. Gen. Dev Datt & Family v. ITO (1982) 13 TTJ (Del) 258. The learned counsel has, therefore, submitted that the CIT(A) is not justified in directing the AO to impose penalty for the period from 1st Jan., 1985 to 24th April, 1985. It is submitted that the entire delay was due to reasonable and sufficient cause and the AO has also waived interest under Section 139(8) and 217 of the IT Act, 1961. The order of the CIT(A) may, therefore, be vacated.
5. Shri S. Das, the learned Departmental Representative, opposed the submission by supporting the order of the CIT(A).
6. Having heard the rival parties and on going through the orders of the authorities below and after careful consideration of the facts of the case and the paper book filed by the assessee's counsel, we are of the opinion that the appeal by the assessee deserves to succeed. We find that the facts of the case are not disputed by either side. We also find that the AO has waived interest under Section 139(8) and Section 217 under Rule 40 and Rule 117A of the IT Rules, 1962 as per order dt. 5th Oct., 1991. While waiving interest under Section 139(8) of the Act, the AO has held that the assessee was prevented by reasonable cause from filing the return of income in time. We also find that the decision of the Tribunal Bombay Bench 'A' and Delhi Bench, cited and relied on by the learned counsel of the assessee supports his argument. For the reasons stated above, the order of the CIT(A) is vacated.