Belated return penalty depends on reasonable cause for delay, not merely later filing or acceptance of the return.

Penalty for belated filing under section 271(1)(a) cannot be deleted merely because the return was later filed under section 139(4) and accepted. The controlling inquiry is whether the assessee failed to furnish the return within the prescribed time and whether any explanation showing reasonable cause for the delay was offered. Absence of an intention to evade tax and correctness of the return do not by themselves negate liability for delayed compliance, though such considerations may affect quantum. On the facts, no reasonable cause was shown, so cancellation of the penalty was unsustainable and the issue was answered in favour of the Revenue.

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Issues: Whether penalty under section 271(1)(a) of the Income-tax Act, 1961 could be cancelled merely because the return was filed under section 139(4) and accepted, without any finding of reasonable cause for the delay.

Analysis: The statutory focus under section 271(1)(a) is the assessee's failure to furnish the return within the prescribed time and the absence of any explanation showing reasonable cause for the delay. Mere filing of a return under section 139(4), or its acceptance by the assessing authority, does not by itself extinguish the liability arising from delayed compliance with section 139(1). The Tribunal's approach, based on the absence of an intention to evade tax and the correctness of the return, overlooked the controlling question whether any explanation for the delay had been offered. Such considerations may bear upon quantum, but they do not justify deletion of penalty where no reasonable cause is shown.

Conclusion: The cancellation of penalty was unsustainable and the answer to the referred question is in favour of the Revenue and against the assessee.

Ratio Decidendi: Liability to penalty for belated filing is not avoided merely because the return is ultimately filed under section 139(4) and accepted; in the absence of any explanation showing reasonable cause for the delay, penalty under section 271(1)(a) cannot be deleted.

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