Reasonable excuse for non-filing an income estimate accepted where a firm had not yet determined its own income.

A partner whose income was entirely derived from a firm was held to have a reasonable excuse for not filing an estimate of income under Section 212(3A) when the firm itself had not ascertained its income by the relevant date. On that footing, the partner could not genuinely estimate her own income for compliance purposes, so the default attracted no penalty under Section 273(c). The firm's unresolved income position was treated as the operative basis excusing the partner's non-filing, and the penalty was therefore correctly cancelled. The Revenue's request for a reference was also declined.

---

---

Issues: Whether the partner of a firm could claim reasonable excuse for not filing an estimate of income under Section 212(3A) of the Income-tax Act, 1961, when the firm itself had not ascertained its income, so as to avoid penalty under Section 273(c) of the Income-tax Act, 1961.

Analysis: The assessee derived her entire income from the firm. Since the firm had not determined its own income by the relevant date, the partner could not genuinely estimate her own income for the purpose of compliance with Section 212(3A). The Court accepted that the firm's ignorance of its income constituted a reasonable excuse for the partner's default within the meaning of Section 273(c).

Conclusion: The penalty on the assessee was rightly cancelled, and no case was made out for requiring the Tribunal to refer the questions at the instance of the Revenue.

---