JUDGMENT
1. Heard learned counsel for the parties and perused the order passed by the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur.
2. We are satisfied that no substantial question of law arises for consideration of this court in this appeal under Section 260A of the Income-tax Act, 1961.
3. The respondent has filed returns of his income for the assessment years 1985-86 and 1986-87 on February 22, 1988. Along with the returns tax as per self-assessment was also paid. The assessment in this case for the assessment year 1985-86 was completed on March 22, 1988. As the return was filed beyond the time prescribed under Section 139(1) of the Income-tax Act, 1961, the proceedings for levying penalty for late filing of the return under Section 271(1)(a) and Section 273 of the Income-tax Act, 1961, were initiated against the assessee during the course of those assessment proceedings. The assessee explained that the entire income consisted of profits arising out of the sales of plot of land which is 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 under Section 45 of the Act. Since he invested the proceeds from transfer of such assets in eligible assets the 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 the 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 such transfer of the 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 the Chapter
relating to computation of capital gains. On this advice, the assessee immediately filed the returns for the assessment years 1985-86 and 1986-87 on February 22, 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 March 30, 1988. This order was also challenged before the Commissioner of Income-tax (Appeals), Ajmer, who finding the 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 Income-tax Appellate Tribunal, Jaipur Bench, Jaipur. The present appeal relates to the 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 of Income-tax (Appeals) in setting aside the penalty under Section 271(1)(a) and 273 of the Income-tax Act for the assessment year 1986-87. As the facts for the assessment year 1985-86 were not different from the facts in the assessment year 1986-87, the Tribunal following its decision relating to the assessment year 1986-87 dismissed the appeal filed by the Revenue. It is common ground that decision of the Income-tax Appellate Tribunal for the assessment year 1986-87 has been accepted by the Revenue and no appeal has been filed against that order.
4. Whether the explanation furnished by the assessee for late filing of the return in the facts and circumstances is sufficient and satisfactory or not is a question of fact.
5. In the aforesaid facts and circumstances we are of the opinion that no question of law much less a substantial question of law arises for consideration.
6. Accordingly, the appeal fails and is hereby dismissed.