Reasonable cause for delayed return filing defeated penalty where extension was sought and rejection was never communicated.

Penalty for late filing of return was not sustainable where the assessee had sought extension of time in Form No. 6 and showed reasonable cause for delay, including illness of the accountant. The non-communication of any rejection of the extension request supported the assessee's bona fide belief that time had been allowed, and the penalty order was found to be stereotyped and unreasoned. On these facts, the assessee was held to have discharged the burden of proving reasonable cause, and the penalty was deleted.

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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 justified where the assessee had sought extension of time and claimed reasonable cause for delay.

Analysis: The return was filed beyond the due date, but the assessee had moved applications in Form No. 6 seeking extension of time and gave illness of the accountant as the cause for delay. The request for extension was not communicated as rejected, and the assessee was treated as having acted under a bona fide belief that the applications had been favourably considered. The order imposing penalty was also found to be stereotyped and unsupported by reasons. On these facts, the assessee was held to have discharged the burden of showing reasonable cause for the delay.

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

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