Reasonable cause for delayed return filing gave rise to a referable question of law under income-tax penalty proceedings.

Penalty under section 271(1)(a)(i) was imposed for delay in filing the return, but the Tribunal accepted the assessee's explanation of bona fide belief and absence of guilty intention. In reference proceedings under section 256(2), the issue was whether that conclusion gave rise to a referable question of law on reasonable and sufficient cause for the delay. The Court held that such a question of law did arise and directed the Tribunal to state the case and refer the question.

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Issues: Whether, on the facts and in the circumstances of the case, a question of law arose from the Tribunal's refusal to state the case on the issue whether the assessee had reasonable and sufficient cause for the delay in filing the return.

Analysis: The assessee's return was filed after substantial delay, and penalty had been imposed under section 271(1)(a)(i) of the Income-tax Act, 1961. The Tribunal had accepted the assessee's explanation of bona fide belief and absence of guilty intention. In reference proceedings under section 256(2), the only question was whether the Tribunal's conclusion gave rise to a referable question of law.

Conclusion: The Court held that the question of law proposed by the applicant did arise and directed the Tribunal to state the case and refer the question to the Court.

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