Reasonable cause defeats penalty for failure to furnish advance tax estimate under section 273(b) when the factual explanation is accepted.

Where an assessee shows reasonable cause for not furnishing the estimate of advance tax, penalty under section 273(b) of the Income-tax Act is not leviable. The Calcutta HC noted that the assessee was new to business, of tender age, and acted under the overall control of a senior partner; that factual finding was unchallenged. On those facts, the statutory basis for penalty was absent, and the reference on the first question became academic.

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Issues: Whether penalty under section 273(b) of the Income-tax Act, 1961, could be imposed where the assessee had reasonable cause for not furnishing the estimate of advance tax.

Analysis: The finding of fact that the assessee was new to the business, of tender age, and under the overall control of the senior partner established reasonable cause for the default. That finding was not challenged. On that footing, the statutory basis for penalty was absent, and the first question referred became academic.

Conclusion: Penalty under section 273(b) of the Income-tax Act, 1961, could not be imposed on the assessee.

Ratio Decidendi: Where the assessee establishes reasonable cause for failure to furnish the required estimate of advance tax, penalty under section 273(b) is not leviable.

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