ORDER
N.V. Balasubramanian, J.
1. The assessee was a minor and was admitted to the benefit of a partnership in a firm styled as Mysore Silk Palace which was carrying on business in Madras. The assessee became major on 1st April, 1976. During his minority, his affairs in the firm were looked after by his natural guardian, his father. There was a delay in filing the returns of the assessee for the asst. yrs. 1971-72 to 1975-76 and the delay was partly caused by the finalisation of accounts of the firm.
2. The ITO completed assessments for the asst. yrs. 1971-72 to 1975-76 and initiated the proceedings under s. 271(1)(a) of the IT Act, 1961 (hereinafter referred to 'the Act') and levied penalties under s. 271(1)(a) of the Act. The ITO issued notice proposing to levy penalties and there was no response at all from the assessee and hence he levied penalties for all of the four years, as under :
----------------------------------------------------------------------Asst. yrs. Date of Date of Period of Penaltyfiling of filing of default leviedthe return the return (determinedof the firm. by ITO)----------------------------------------------------------------------1971-72 31-3-1977 01-12-1973 63 Rs. 2,0101972-73 31-3-1977 01-12-1973 54 Rs. 1,9801974-75 12-3-1976 14-10-1975 19 Rs. 3,3501975-76 31-3-1978 30-05-1976 31 Rs. 6,790----------------------------------------------------------------------
The assessee preferred appeals before the AAC against the orders levying of penalty. But the AAC confirmed the orders of the ITO levying penalty. The assessee carried the matter in appeal before the Tribunal, and before the Tribunal it was contended on behalf of the assessee that under the provisions of the Act, the guardian was responsible for the filing of the returns of the minor and under these circumstances the penalty proceedings could not be initiated against him for the default committed during the period when the assessee was a minor. It was submitted that the penalty was imposed on the minor directly and penalty could not be imposed on a minor for the delay in filing the returns. It was also pleaded that there was a sufficient cause in filing income for the three years is question. The Tribunal held that till 1st April, 1976, the assessee was a minor and till that date, the default was on the guardian-father and the obligations cast on the representative-assessee would clearly indicate that the penalty could be levied for the default committed during the period when the assessee was a minor. The Tribunal also rejected the contention that there was no reasonable cause for the delay for the asst. yrs. 1971-72, 1972-73, 1975-76 but for the asst. yr. 1974-75, the Tribunal found that there was justification in not filing the return in time. The Tribunal held that for the asst. yr. 1975-76, there was a delay of 21 months in filing the return even after taking into account of the finalisation of the accounts of the firm and there was no explanation by assessee whatsoever for the subsequent period; and in this view of the matter, the Tribunal confirmed the penalty for the period of 21 months. Thus, the Tribunal allowed the assessee's appeal for the asst. yr. 1974-75 in full, but allowed the appeal for 1971-72, 1972-73, 1974-75 in part.
3. The assessee has challenged the order of the Tribunal and sought a reference and the Tribunal has stated a case and referred the following questions of law for the asst. yrs. 1971-72, 1972-73 and 1975-76 under s. 256(1) of the IT Act for our consideration :
'(1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the penalty under s. 271(1)(a) could be imposed on the applicant-minor for the delay in filing the returns
(2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the requirements under s. 271(1)(a) were satisfied in the case
(3) Whether, on the facts and in the circumstances of the case, the Tribunal erred in law in placing the burden of establishing that the delay in filing the return was with reasonable cause on the applicant and upholding the penalty ?'
4. Mr. K. Ramagopal, learned counsel appearing for the assessee, submitted that the penalty was imposed on the minor and therefore the penalty is not sustainable in law. He referred to relevant provisions of the Act and submitted that during the period of minority, the assessee could not file the returns and therefore, the penalty could not be imposed on the minor.
5. Mr. C. V. Rajan, learned counsel for the Revenue, submitted that the penalty in this case was imposed on the assessee, when he became major and it is not the case of the levy of penalty on the minor.
6. We have carefully considered the submissions made by the learned counsel for the assessee and the learned counsel for the Revenue. In so far as the first question referred to us is concerned, the question proceeds on a wrong assumption that penalty was levied on a minor. The Tribunal found that the assessee attained majority on 1st April, 1976, and the penalty orders for the assessment years in question were passed on 23rd February, 1979. It is, therefore, clear that penalty was imposed was not imposed on a minor, but only after the assessee attained majority the penalty was imposed and consequently, the question proceeds on a wrong assumption that penalty was levied on a minor.
7. The contention of the learned counsel for the assessee is that the default in filing the returns occurred during the period when the assessee was a minor and, therefore, the penalty cannot be imposed on the assessee as he was not responsible for the delay in filing the return. The submission overlooks the provisions of ss. 160 and 161 of the Act.
8. Under s. 160 of the IT Act, 1961, the guardian of the minor is treated as a representative-assessee and every representative-assessee is deemed to be an assessee for the purpose of the Act. The liability of the representative assessee is found in s. 161 of the Act and under s. 161 of the Act, every representative-assessee, as regards the income in respect of which he is a representative assessee, shall be subject to the same duties, responsibilities and liabilities as if the income were income received by or accruing to or in favour of him beneficially, and shall be liable to assessment in his own name in respect of that income. The expression, 'such duties, responsibilities and liabilities' found in s. 161 of the Act clearly indicates that the representative assessee is duty bound to file the return on behalf of the minor and he is also responsible to file the return in time on behalf of the minor, and if there is any default or delay on his part in filing such a return, then the liability for such default or delay is also liable to be imposed on him.
9. This Court, in CIT vs. R. Srinivasan held though the tax was payable for the income of the minor, since the minor cannot file the return, his father and guardian has to file the return on behalf of the minor for the minor's income. When the guardian has not taken any steps to file the return in time, the guardian would be responsible and it cannot be stated that no penalty can be levied on the minor. The penalty imposed in such a circumstance would be on the guardian and the guardian will have a right to recover the tax paid on behalf of the minor from and out of the estate of the minor.
10. Therefore, we are of the opinion that even in the case of a minor, the return has to be filed within time and if it is otherwise, there will be no liability on the representative-assessee to file the return on behalf of the minor leading to non-compliance of an essential requirement of the enactment of filing the return in time and it would open the door for escapement of assessment of the minor's income altogether. The legislature certainly could not have intended such a contingency as is clear from the various provisions of the Act, more particularly ss. 160 and 161 of the Act and the statutory responsibility cast upon the representative-assessee on behalf of the minor in the matter of filing the return. Therefore, we are not able to accept the contention of the learned counsel for the assessee that penalty cannot be imposed for the default occurred in filing the returns during the period when he was a minor. The next question that arises is whether the order of penalty was validly passed. In the instant case, the minor had attained majority when the penal proceedings were initiated and the ITO after issuing notice to the assessee imposed penalty on the assessee for the period during which the assessee was a minor. Therefore, we are of the view that the ITO was justified in levying the penalty on the assessee as on the date when the order of penalty was passed, he could not levy penalty on the representative-assessee, as the guardian can no longer be considered as a representative-assessee and he ceased to be a guardian on the attaining of the majority by the assessee. Therefore, we are of the view that the Tribunal is correct in holding that the penalty was validly imposed on the assessee.
11. In so far as the second question that is referred at the instance of the assessee is concerned, we find that the assessee has not offered any explanation for the delay in filing the return before the ITO nor any explanation was offered by the assessee before the Tribunal. For the asst. yrs. 1971-72, 1972-73, the Tribunal has positively found that there was no reasonable cause at all and in the absence of any explanation by the assessee, we are of the view that the Tribunal is correct in upholding the penalty for the abovesaid assessment years.
12. In so far as the asst. yr. 1975-76 is concerned, the Tribunal took notice of the fact that there was a delay in finalisation of the accounts of the firm and the Tribunal found that the assessee had reasonable cause for the delay in filing the return till the finalisation of the accounts of the firm. However, for the period subsequent to the completion of the accounts, i.e., for the period of 21 months, there was no explanation offered by the assessee and in the absence of any explanation for the delay, the Tribunal held that the penalty levied could be restricted to a period of 21 months. We are of the view that the Tribunal has come to a correct conclusion in holding that the requirements of s. 271(1)(a) of the Act are satisfied. It is also relevant to notice that the Tribunal found that there was a reasonable cause for the delay till the firm filed the return i.e. on 30th May, 1976, but even before that date, the assessee has attained the majority on 1st April, 1976, and the delay of twenty one months has occurred after the assessee has become a major and for the said delay, the assessee did not offer any explanation. Moreover, the assessee has not adduced any evidence or explanation for the delay, and therefore, the question of placing burden of proof on the Department does not arise on the facts of the case.
13. The first question proceeds on the assumption as if the penalty was imposed on the minor. We have already held that the penalty was imposed on the assessee after he attained the majority. We, therefore, reframe the first question of law as under :
'Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in upholding the orders of penalty imposed under s. 271(1)(a) of the Act on the assessee for the delay in filing the return during the period when the assessee was a minor ?'
We answer the first question of law, as reframed by us, in the affirmative and against the assessee.
14. In so far as the second question is concerned, we answer the same in the affirmative and against the assessee and we answer the third question referred to us in the negative and against the assessee. However, in the circumstances of the case, there will be no order as to costs.