Reasonable cause for delayed return filing: penalty under section 271(1)(a) cancelled where share income depended on firm accounts.

Late filing penalty under section 271(1)(a) was found unsustainable where the assessee could not correctly determine share income until the firm completed its accounts and filed its own return. The delay was supported by surrounding facts, including the assessee's prompt filing soon after the firm's return, showing reasonable cause for the default. The absence of an application in the prescribed form was not treated as decisive against the assessee, and the penalty was cancelled.

---

---

Issues: Whether the penalty for late filing of the return under section 271(1)(a) of the Income-tax Act, 1961 was sustainable when the assessee's share income could not be correctly determined until the firm's accounts were completed and the firm's return was filed belatedly.

Analysis: The delay was explained by the non-completion of the firm's accounts, which prevented the assessee from filing a correct and complete return until the firm filed its own return. The facts showed that the assessee filed his return shortly after the firm did so, and the surrounding circumstances supported the explanation for delay. On those facts, the default was treated as arising from a reasonable cause, and the absence of an application in the prescribed form was not treated as decisive against the assessee.

Conclusion: The penalty under section 271(1)(a) was not attracted and was cancelled, in favour of the assessee.

---