Commissioner of Income Tax vs Anwarkhan Mehboob Co.

A.K. Mathur, J.—In the case (M.C.C. No. 172 of 1987) a reference has been refused at the instance of the revenue, therefore, this application has been made for calling the reference from the Tribunal. Similar are the cases, M.C.C. No. 183 of 1987 and M.C.C. No. 184 of 1987. Brief facts giving rise to all these three references are that the assessee respondent is a registered firm and earning income from business of Bidi manufacturing and sale. Reference (M.C.C. No. 172 of 1987) relates to the period of 1976-77. In this case, the assessee has filed a return belatedly, therefore, the penalty u/s 271(1) (a) of the income tax Act, 1961, was imposed and appeal was preferred and that was affirmed and ultimately, the matter reached to the Tribunal. The Tribunal after considering over the matter found that it is true that the return has been filed belatedly. It is after 9 months from the date of accounting year. The assessee requested for extension of time. The ITO granted time up to 31-7-1976 and the return was furnished late by 30 months. The Tribunal after considering the explanation given by the assessee observed-

We are of the considered opinion that the Commissioner (Appeals) was influenced by the factum of the assessee committing default for the earlier years as well. The reasons given by the assessee have not been controverted by the authorities below. To our mind, on the peculiar facts of the case and taking into consideration that the firm is by now defunct due to, inter alia, internecine activities of the groups of the partners, the widespread business of the assessee having various branches and the incomplete accounts of the earlier years, resulted in the delay in the completion and filing of the return for the year under appeal. This constituted a reasonable and sufficient cause for which penalty could not be imposed in the manner done by the authorities below. We, therefore, cancel the penalty and allow the appeal.

Aforesaid reason was given by the Tribunal while condoning the delay. It is true that the return was filed belatedly and the explanation given by the assessee did not find favour with the appellate authority. But, in the second appeal at the instance of the assessee, the Tribunal held that the explanation given by assessee for delay is satisfactory and it condoned the delay. It is essentially a question of fact and there is no question of law. The Tribunal on the facts felt satisfied and condoned the delay. Therefore, it is an essential question of fact and no question of law is involved.

In these circumstances, we are of the opinion that the Tribunal has rightly declined to make a reference. Similar is the matter in the case of M.C.C. No. 183 of 1987 and M.C.C. No. 184 of 1987. Therefore, we are of the opinion that no question of law arises in all these three references and the same are rejected.