Joginder Pall, A.M. - (1.) THESE four appeals of two assessees namely Maya Lena Milap Kaur Toor and Paul jawand Singh Toor have been directed against four orders (all dt. 25th July, 1995) of Dy. CIT(A) Patiala for asst. yrs. 1984-85 and 1985-86 respectively in each of the two cases. Since the issues involved in all the four appeals are identical, these were heard together and are being disposed of by this consolidated order for the sake of convenience.
(2.) In all the four appeals, both the assessees have taken identical grounds of appeal to the effect that Dy. CIT(A) was not justified in sustaining part of the penalties imposed by the AO "under Section 271(l)(a) for late filing of returns of income for the aforesaid assessment years. 2.1. The facts of the cases are that both Maya Lena Milap Kaur Toor and Paul Jawand Singh Toor were Canadian citizens. Their father, Dr. T.P.S. Toor was of Indian origin and owned certain agricultural lands, which were acquired by the Government for which compensations were awarded. The amount of compensation awarded was disputed in Courts which resulted in subsequent enhancement of the same. Both the assessees were co-sharers in the acquired lands. Subsequently the AO issued notices under Section 148 for the asst. yrs. 1982- 83 to 1988-89 for bringing to tax the compensations and interest awarded by the Courts. Both the assessees filed the returns of income for all the asst. yrs. 1982-83 to 1988-89 on 19th Oct., 1992. Since these returns were filed late, the AO initiated penalty proceedings under Section 271(l)(a) for all the assessment years. In reply to the, show-cause notice, the assessees submitted that they were foreign nationals and rarely come to India for short durations. All the matters relating to agricultural land were being handled by their father namely Dr. TPS Toor who died on 5th Aug., 1990 in a motor car accident. The assessees were not aware of the income-tax proceedings in India. As these matters were being looked after by their father. The sudden demise of their father, caused un bearable mental stress to their mother and all other family members besides other relatives had also filed cases in the various Courts- In fact the assessees and their other family members had received certain threats from some persons for which applications were made to Punjab Government authorities to provide them adequate protection. The assessees also engaged C.A. at Chandigaih and an advocate at Patiala. They took some time in collecting the necessary information required for filing the return. All these factors resulted in filing the returns of income late. Therefore, it was contended that penalty under Section 271(l)(a) may not be imposed as the assesses were prevented by a reasonable cause in filing the returns of income late. However, the AO took note of the fact that delay in filing the returns upto the date of death of their father on 5th Aug., 1990, and four months thereafter could be considered due to a reasonable cause but thereafter the delay for the period from 1st Jan., 1991 to. 19th Oct., 1992, could not be considered due to a reasonable cause. The AO, therefore, levied penalty under Section 271(l)(a) amounting to Rs. 18,320 and Rs. 16,377 in each of the two cases for the asst. yrs. 1984-85 and 1985-86 respectively. 2.2. Being aggrieved with the orders of AO, the assessees impugned the penalties before the first appellant authority, where similar contentions, as made before the AO, were reiterated. Learned Dy. CIT(A) reduced the penalty for a period of four months for each of the assessment years by recording the following identical finding as per para 6 of the appellate orders : "I have considered the facts of the case and the arguments of the learned counsel. In the case of Shri Prem Parkash Singh TOOT, the facts of which are exactly similar excepting the fact that delay in the case of the appellant is for 22 months where as delay in the case of Shri Prem Parkash Toor was for 20 months as evidence in the case of the appellant. I had directed the Asstt. CIT to impose the penalty for the default of 16 months at the rate of 2 per cent per month of the tax payable. The appellant had been allowed relief at the rate of 8 per cent of the tax payable by ignoring the delay of period of 4 months- In view of the reasons given in the appellant order dt. 6th Feb., 1995, passed in the case of Shri Prem Parkash Singh Toor in the appeal No. 10/IT/PTA/1994-95 the Asstt. CIT is also directed to impose the penalty for the delay for the period of 17 months at the rate of 2 per cent per month on the tax payable. The delay for the period of 4 months is directed to be condoned." 2.3. Being aggrieved with the orders of Dy. CIT(A) the assessees have preferred these appeals before us. The learned counsel for the assessee submitted that learned Dy. CIT(A) was not justified in allowing partial relief. He submitted that in view of the reasons explained before the lower authorities, the default for the entire period should have been accepted and the penalty levied by the AO should have been deleted. He further submitted that on identical facts the CIT(A), Patiala has deleted the penalty in the case of Shri Prem Parkash Singh Toor for the asst. yrs. 1986-87 and 1987-88. A copy of the order was also placed on our record. 2.4. Learned Departmental Representative for the Revenue, on the other hand heavily relied on the orders of lower authorities. We have heard both the parties and have carefully considered the rival submissions. We have also examined the facts, evidence and material on record and perused the orders of tax authorities below.
(3.) THE undisputed facts of the case, as discussed above are that both the assessees are Canadian citizens and their father Dr. T.P.S. Toor was of Indian origin. He owned agricultural lands in a village which were acquired by the Government. As a result, their father received compensation. Both the assessees were co-sharers in the lands acquired by the Government. As a result of suit filed in the High Court the assessees received enhanced compensation along with interest for which the AO issue notices under Section 148 for the asst. yrs. 1982-83 to 1988-89 to bring to tax the aforesaid amounts. It is also a fact that both the assessees filed returns for all the assessment years together on 19th Oct., 1992. THE facts also show that their late father, Dr. T.P.S. Toor expired in a motor car accident while in India on 5th Aug., 1990. THE fact that these income-tax matters were being looked after by their late father, stand accepted by the AO as he has condoned the delay till Dec., 1990, due to this fact. Now the question which requires to be considered is whether the assessees were prevented by a reasonable cause in filing the returns of income late. No doubt, first appellate authority has accepted the delay for further period of four months and upheld the penalty levied for the remaining period but in the case of Shri Prem Parkash Singh Toor, the CIT(A), on identical facts, has accepted the delay even for the remaining period by recording following finding in para 5 of the appellate order dt. 6th Sept., 1995, for the asst. yrs. 1986-87 and 1987-88 : " I have gone through the facts of the case and submissions made by the appellant's counsel and find force in them. After it was accepted by the AO that the appellant was prevented by reasonable cause from furnishing the returns upto 31st Dec., 1990, it was for him to discharge the onus that the appellant had no reasonable cause thereafter. THE deadline of 31st Dec., 1990 in the circumstances of the case appears to have been drawn in an arbitrary manner. THE following submissions made by the appellant's counsel before the AO have not been considered at all: (i) As the appellant was a foreign national, a C.A. was engaged from Chandigarh to collect relevant data from various offices namely Land Acquisition office, Chandigarh, Distt. Courts, High Courts, Banks, etc.; (ii) THE appellant also engaged an advocate namely Shri K.C. Nirola, who was unfortunately involved in an accident and remained confined to bed for about three months from May, 1992; (iii) THE amount of compensation receivable by the appellant was in dispute owing to litigation started by his stepmother in Court of law. THEse proceedings are still persisting; and (iv) THE appellant could not succeed in drawing money from the bank account to deposit the self-assessment tax, a prerequisite for filing the income-tax return. If all these factors are taken into account, the appellant's failure for delay in the intervening period in question i.e. from 1st Jan., 1991, to 15th Sept., 1992, cannot be said to be without reasonable cause. It was not obligatory on the part of the AO that the penalty should in any case be levied. It may also be incidentally mentioned that the returns for the earlier years namely from asst. yr. 1982-83 onwards were also filed on the same date and this itself is a valid cause for delay in filing of the subsequent returns for the years under consideration. In the facts and circumstances of the case, therefore, I am of the opinion that the appellant's plea regarding reasonable cause for delay in filing of the returns should have been accepted and no penalties should have been levred. Penalties levied under Section 271(l)(a) for both the assessment years are directed to be deleted." While deleting the penalty, the CIT(A) has also taken note of the fact that returns for the earlier assessment years from asst. yrs. 1982-83 onwards were, also filed on the same date as in these cases and this, itself, constitute a valid cause for delay in filing of the subsequent returns for assessment years under consideration. THE fact that the father of the assessees had expired in a sudden car accident in 1990 and it took a considerable time for the assessees to collect all the relevant details and information necessary for filing the returns of income for the aforesaid assessment years have not been disputed by the Revenue. Taking into account these facts, we are of the considered opinion that there does not seem to be any conscious disregard on the part of the assessees to delay the filing of the returns out for the remaining period for the above-mentioned assessment years.;