01 June 2008
Suppose one person have not filed his return of income for the FY 06-07 while his tax has been deducted by the employer for that year. He had filed his return for the FY 05-06.
Now what would be the legal consequences? Will he be entilteled for the refund for the FY 06-07 because his Deduduted Tax was over his actual tax liability for that year.
02 June 2008
Furnish the return voluntarily and claim refund. Since the return is furnished voluntarily before issuing any penalty notice the chance for imposing penalty for failing to furnish return before 31.3.2008 is megre.
02 June 2008
TO AVOID PENALTY REASONABLE CAUSE FOR DELAY WILL HAVE TO BE ESTABLISHED.
Scope of the expression ‘reasonable cause’ - The words “reasonable cause” in section 273B must necessarily have a relation to the failure on the part of the assessee to comply with the requirement of the law which he had failed to comply with. In case of delay in compliance, the cause shown must be for the whole of the period of the delay and not merely for a part thereof. If the cause shown is such as to explain the delay as a whole and constitutes a good reason for the non-compliance, no penalty would be leviable. However, in cases where the cause shown is such as to explain a part of the delay, or the cause shown is only to mitigate the gravity of the non-compliance, such a cause cannot be extrapolated and treated as being a good cause for the whole of the period of the delay in its entirety. All or nothing, the proposition canvassed by the petitioner would be detrimental to assessees themselves if the choice placed before the Commissioner in all cases were to be that he should set aside all penalties the moment he finds that there is a cause, though not fully satisfactory, but which may be accepted in part which may justify a grant of a partial relief. If the commissioner were to be compelled to grant relief in whole even where the cause shown is not such as to explain in full the delay or the gravity of the non-compliance, the Commissioner would be compelled to reject and deny all relief. A construction which would preserve the exercise of the power in favour of the assessee in circumstances which warrant it is to be preferred to a construction which would result in the likelihood of denial of relief - Kalakrithi v. ITO [2002] 253 ITR 754 (Mad.).
Reasonable cause as applied to human action, is that which would constrain a person of average intelligence and ordinary prudence. The expression ‘reasonable’ is not susceptible of a clear and precise definition; for an attempt to give a specific meaning to the word ‘reasonable’ is trying to count what is not number and measure what is not space. It can be described as rational according to the dictates of reason and is not excessive or immoderate. The word ‘reasonable’ has in law the prima facie meaning of reasonable with regard to those circumstances of which the actor, called on to act reasonably, knows or ought to know. Reasonable cause can be reasonably said to be a cause which prevents a man of ordinary prudence and average intelligence, acting under normal circumstances, without negligence or inaction or want of bona fides - Azadi Bachao Andolan v. Union of India [2001] 252 ITR 471 (Delhi).
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