Reasonable cause for belated return filing accepted where extension request was made and accounts were not finalised.

Penalty for late filing of a return under section 271(1)(a) was held unsustainable where the assessee had applied in Form 6 for extension of time and the delay stemmed from non-finalisation of the firm's accounts. The extension request was treated as contemporaneous evidence of difficulty in filing on time, and the absence of any order or communication on that request was noted as a relevant circumstance. The assessee could not be faulted for the delay in the circumstances, and reasonable cause was accepted. The penalty was cancelled in favour of the assessee.

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Issues: Whether penalty for late filing of the return under section 271(1)(a) of the Income-tax Act, 1961, was sustainable when the assessee had applied for extension of time and the delay was attributed to non-finalisation of the firm's accounts.

Analysis: The assessee had filed an application in Form 6 seeking extension of time, which was contemporaneous evidence of difficulty in filing the return within time. No order on the application was passed or communicated by the Income-tax Officer, and the assessee could not compel a decision on the request. The delay in finalisation of the firm's accounts was also treated as a relevant circumstance showing reasonable cause for the belated return.

Conclusion: The penalty could not be sustained and was cancelled; the issue was decided in favour of the assessee.

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