Reasonable cause bars penalty for failing to furnish an advance tax estimate when the Tribunal's factual finding is supported.

Under section 273(1)(b), penalty for failure to furnish an advance tax estimate is attracted only when the default is without reasonable cause. The assessee's explanation must be examined on the facts, and if the Tribunal accepts reasonable cause, the authority must exercise discretion judicially before sustaining penalty. In reference jurisdiction, the High Court will not disturb that factual finding unless it is perverse or unsupported by evidence. Applying that standard, the finding of reasonable cause was upheld and the penalties were not sustained.

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Issues: Whether the assessee had reasonable cause for not furnishing the estimate of advance tax and whether penalty under section 273(1)(b) could be sustained on the facts found by the Tribunal.

Analysis: Under section 273(1)(b), penalty is attracted only where the failure to furnish the estimate is without reasonable cause. The assessee must explain the failure, and if the explanation is accepted no penalty arises; if it is rejected, the authority must still consider the facts and circumstances and exercise discretion judicially. The existence of reasonable cause is a question of fact. In reference jurisdiction, the High Court does not interfere with the Tribunal's finding unless it is perverse or unsupported by evidence. On the materials accepted by the Tribunal, including the surrounding assessment history, the finding that there was reasonable cause could not be characterised as perverse.

Conclusion: The Tribunal's cancellation of the penalties was upheld and the issue was answered in favour of the assessee.

Final Conclusion: The reference failed, and the penalties levied for failure to furnish advance tax estimates were not sustained.

Ratio Decidendi: In proceedings under section 273(1)(b), once the Tribunal finds reasonable cause for the failure to furnish an advance tax estimate, the High Court will not disturb that finding in reference jurisdiction unless it is perverse or unsupported by evidence.

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