Delayed return explanation treated as a factual issue, with no substantial question of law arising under income tax appeal.

The assessee's belated return, filed with self-assessment tax, was supported by an explanation that the income was first treated as capital gains from transfer of capital assets but, on professional advice, was later understood to be business income, making the earlier exemption claim untenable. That explanation was accepted by the appellate authority and the Tribunal on the same factual basis. The High Court treated the sufficiency of the explanation as a question of fact and found that no independent question of law, much less a substantial question of law under section 260A, arose for consideration.

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Issues: Whether the explanation furnished for the delayed filing of the return was sufficient and whether any substantial question of law arose under section 260A of the Income-tax Act, 1961.

Analysis: The assessee had filed the returns belatedly along with self-assessment tax and explained the delay on the basis that the income was initially treated as capital gains arising from transfer of capital assets, but was later understood on professional advice to be business income, making the earlier claim of exemption untenable. The explanation had been accepted by the appellate authority and the Tribunal on the same factual foundation. The sufficiency of such explanation in the surrounding circumstances was treated as a question of fact. In view of that factual finding, no independent question of law, much less a substantial question of law, was shown to arise for consideration in the appeal.

Conclusion: The explanation for the delay was accepted as sufficient on facts, and the appeal was held to raise no substantial question of law.

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