Reasonable cause for delayed return filing sustained, so penalty for late filing was not leviable.

Reasonable cause for delayed return filing was accepted where the assessee's accounts were ready after audit, further time was needed to compile particulars, and the director's signature had to be obtained in the United Kingdom. On those facts, the Tribunal treated the return filed on 5 January 1978 as having been lodged within a reasonable time after completion of audit, and the finding of reasonable cause was upheld. As a result, penalty under section 271(1)(a) of the Income-tax Act, 1961 was not leviable.

---

---

Issues: Whether the Tribunal was justified in holding that no penalty was leviable under section 271(1)(a) of the Income-tax Act, 1961, on the ground that there was reasonable cause for the delay in filing the return.

Analysis: The Tribunal recorded that the assessee's accounts were ready by the end of September 1977 after audit under section 594 of the Companies Act, 1956, and accepted that some further time was required to collect particulars and obtain the director's signature on the return in the United Kingdom as required by section 160 of the Income-tax Act, 1961. On those facts, the Tribunal found that the return filed on January 5, 1978 was within a reasonable time after completion of the audit and that the delay was explained by reasonable cause.

Conclusion: The finding that reasonable cause existed for the delayed filing was upheld and the penalty under section 271(1)(a) was not exigible.

---