ARGUMENT ADV ADVANCED ANCED
A. PLAINTIFF IS LIABLE TO BE PENALIZED
The plaintiffs in this case are liable to be penalized under Section 271(1)(b), 271(1)(c) and 272B of the Income Tax Act as the defaulted under the the Section 1!2(1), 1!2(2) and 1"#(A) of the act and there $as no reasonable cause to %ustif their acts& 1.
T HE P P LAINTIFF F F AILED T O C OMPLY OMPLY T T O T HE N N OTICE OTICE U U NDER S ECTION 142(1) 142(1)
Section Section 1!2(1) of the Income Tax Tax Act 1#'1 states that if an assesse has not furnished furnished his or her Income Tax eturn $ithin the due i*en date, the Assessin +fficer ma ser*e a notice reuire the assesse to furnish the return of his income in the prescribed form and manner& 1 In the present case $hen a notice $as issued to the plaintiff under section 1!2(1) because she had failed to file her Income Tax eturn $ithin the due i*en date, after recei*in the notice, the plaintiff did not file the Income Tax return in the prescribed form and manner, $herein she as-ed her emploee to file the Income Tax eturn on her behalf and the return $as filed alon $ith a $ron .A/ .A/ card number& The The Income Income Tax Tax Act allo$s a person to file Income Income Tax eturns on someone else0s behalf,2 onl if this person is dul authorized b the person on $hose behalf the IT is bein filed and such person should hold a *alid po$er of attorne and this po$er of attorne should be attached alon $ith the return& " In the present case no such prescribed format $as adhered upon and hence $as in contra*ention of the section 1!2(1) of the Income Tax Act and therefore this action rihtfull attracted penalt under section 271(1)(b) of the Act&
1 Section 1!2(1), Income Tax Act 1#'1& 2 Section 1!, Income Tax Act 1#'1& " Taxman0s irect Taxes, !# th 3dition, p& #1!, .ara "'
2.
T HE P LAINTIFF FAILED TO COMPLY TO THE N OTICE U NDER S ECTION 142(2)
Section 1!2(2) of the Income Tax Act 1#'1 states that for the purpose of ma-in enuiries and obtainin full information about the income or loss of an person, the Assessin officer shall i*e a notice to the assesse to meet him and clear all the discrepancies in person& ! In the present case $hen such notice $as issued to the plaintiff, she $as reuired to report to the office of the assessin officer and clear her position on the *arious claims and discrepancies in the return filed, but she did not adhere to the reuirement of the notice and did not appear on the scheduled da, e*en in the repl sent b her to the Assessin +fficer, she did not address ra*e issue under her IT such as usin of a $ron .A/ card number $hile filin returns& 4ence it can be said that she defaulted under Section 1!2(2) of the Income Tax Act $herein she did not adhere to the uidelines of the notice properl and did not respond appropriatel to the inuires made b the Assessin +fficer and thus attractin penalties under section 271(1)(b)& 3.
T HE P LAINTIFF F AILED T O C OMPLY W ITH T HE P ROVISION O F S ECTION 139A
Section 1"#A of the Income Tax Act 1#'1 states that e*er person $ho has been allotted a .A/ number is reuired to uote his correct .A/ number in all his Income Tax eturn 5iled& 6 hen a tax paer fails to do so, he8she attracts a penalt under section 272B of the Income Tax Act 1#'1, $hich states that $hen a person uotes or intimates a number $hich is false, and $hich he -no$s or belie*es to be false, a penalt of s 1, can be le*ied on him& ' In the present case both 9r& Tanda and 9s& iti-a $ere a$are of the fact that the .A/ number mentioned is false and incorrect, and still the filed the $ron .A/ number alon $ith the
! Section 1!2(2), Income Tax Act 1#'1 6 Section 1"#A(6)(a), Income Tax Act 1#'1 ' Section 272B, Income Tax Act 1#'1
return, hence the $ould be liable for default under section 1"#A of the Income Tax Act and $ould attract penalt under section 272B of the Act& 4.
T HE P LAINTIFF W OULD B E L IABLE T O B EST J UDGMENT ASSESSMENT U NDER S ECTION 144
Section 1!! of the Income Tax Act 1#'1 states that $hen an assesse fails to ma-e a return under the specified period of time and fails to compl $ith a notice issued under Section 1!2(1) and Section 1!2(2) of the Act, the assessin officer, after ta-in into account all the material athered b him and after i*in the assesse and opportunit to be heard shall ma-e the assessment of the total income and loss to the best of his %udment and decide upon the sum of return paable b the assesse and also the penalties accordinl& In the present case the plaintiff defaulted on both the rounds $hich leads to the best %udment assessment, $herein she $as not able to file the returns in the time prescribed and she also failed to compl $ith the terms of notice issued under section 1!2(1), and also because she $as issued a notice under Section 1!2(1), It $as not reuired to i*e her opportunit of bein heard& 7 4ence it can be stated that the assessin officer rihtfull made best %udment assessment under Section 1!! and the penalties applied on the findins of such assessment $ould be %ustified& .
T HERE W AS N O R EASONABLE C AUSE B EHIND T HE D EFAULTS
B *irtue of Section 27"B of the Income Tax Act 1#'1, penalt is not li*able under section 271(1)(b), 271(1)(c) and 272B, if the assesse pro*es that there $as reasonable cause for failure&: In the present case there $as no reasonable cause behind all the defaults that the plaintiff made& ;nder section 1"#A, the plaintiff e*en thouh ha*in filed a $ron .A/ number in the first instance, had the opportunit to clear her stance $hen she mailed her repl
7 Section 1!!, Income Tax Act 1#'1 : !"#"$%&'& . ITO <22= 126 Taxman #7 (9ad&)
to the Assessin +fficer& ;nder Section 1!2(1) and 1!2(2) the plaintiff $as i*en enouh time to come and meet the assessin officer $hich she did not adhere to& The best %udment assessment $as made after t$o separate notice and an opportunit to be heard $as i*en to the plaintiff and& It has been established that a Best >udment Assessment cannot be considered an ex parte proceedin,# and the uestion of M*+, %*" $ould not arise as it is not an essential inredient for attractin ci*il liabilities li-e penalties&1 4ence there is no defense that can be ta-en b the plaintiff for their acts and therefore the are liable to be penalized&
# CIT . S*- B/&" S*''0<1#7= 77 IT 6"# (S?) 1 M""$ S&+- ITO<21= 127 IT 1 (elhi),
