Bona fide explanation for delayed return filing rejected; penalty for prolonged default was sustained.

Penalty for inordinate delay in filing an income-tax return was sustained because the assessee failed to show a bona fide explanation for the default. The return remained unfiled for several years after the due date and the delay continued even after notice under section 148. The explanation that accounts could not be finalised due to missing film-production vouchers was rejected, since the claimed loss related to a partner's individual business and not the firm's business. The authorities found no bona fide ground for the delay, so the penalty was upheld.

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Issues: Whether penalty under section 271(1)(a) of the Income-tax Act, 1961 was leviable for the inordinate delay in filing the return, and whether the explanation offered for the delay was bona fide.

Analysis: The return was filed several years after it became due, and even after notice under section 148 the delay continued. The explanation that the accounts could not be finalised because vouchers relating to film production were unavailable was found unacceptable, as the claimed loss related to the individual business of a partner and not the business of the firm. The authorities below had examined the explanation and held that no bona fide ground was made out for the default.

Conclusion: The penalty was rightly sustained and the challenge to the order failed.

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