INCOME TAX OFFICER vs PRITVI RAJ SINGH

By the Court

Heard learned counsel for the parties and perused the order passed by the Tribunal, Jaipur Bench, Jaipur.

We are satisfied that no substantial question of law arises for consideration of this court in this appeal u/s 260A of the Income Tax Act, 1961 (hereinafter referred to as the `the Act'').

The respondent has filed return of his income for the assessment years 1985-86 and 1986-87 on 22-2-1988. Along with return tax as per self-assessment was also paid. The assessment in this case for the assessment year 1985-86 were completed on 22-3-1988. As the return was filed beyond the time prescribed u/s 139(1) of the Act, proceedings for levying penalty for late filing of the return u/s 271(1)(a) and section 273 of the Act, were initiated against the assessee during the course of those assessment proceedings. The assessee explained that entire income consisted of profits arising out of the sales of plot of land which are immovable property. According to him he considered the immovable property of his as ''capital assets'' and gains arising out of transfer of such capital assets were capital gains taxable u/s 45 of the Act. Since he invested the proceeds from transfer of such assets in the eligible assets that capital gains arising out of such transfers were exempted from payment of tax. He had no other taxable income for which he was required to file return. However, subsequently he was advised by his consultant that looking to number and frequency of transactions in land his transactions are likely to be treated as business transactions and not as transfer of capital assets. Therefore, the income arising out of the such transfer of immovable property has to be treated as income from business and not capital gains. Therefore, he is not entitled to benefit of claiming exemption under chapter relating to computation of capital gains. On this advice the assessee immediately filed returns for assessment years 1985-86 and 1986-87 on 22-2-1988, along with full tax as per self assessment. The assessing officer did not accept this explanation and levied penalty for late filing of the return vide order dated 30-3-1988. This order was also challenged before the Commissioner (Appeals), Ajmer, who finding explanation plausible accepted the same and set aside the penalty for delay in filing of the return. The order has been confirmed in appeal by the Tribunal, Jaipur Bench, Jaipur. The present appeal relates to assessment year 1985-86. The Tribunal has accepted the explanation furnished by the assessee for late filing of the return and agreed with the conclusion reached by the Commissioner (Appeals) in setting aside the penalty under sections 271(1)(a) and 273 of the Act for assessment year 1986-87. As the facts for assessment year 1985-86 were not different from the facts in assessment year 1985-86, (sic 1986-87). The Tribunal following its decision relating to assessment year 1986-87 dismissed the appeal filed by revenue . It is common ground that decision of the Tribunal for assessment year 1986-87 has been accepted by the revenue and no appeal has been filed against that order.

Whether explanation furnished by assessee for late filing of return in the facts and circumstances is sufficient and satisfactory or not is a question of fact.

In the aforesaid facts and circumstances we are of the opinion that no question of law much less substantial question of law arises for consideration.

Accordingly the appeal fails and is hereby dismissed.