Reasonable cause defeats return-filing penalty where the assessee acted under a bona fide belief and no deliberate concealment was shown.

Penalty for failure to furnish a return is not sustainable where the assessee shows bona fide belief amounting to reasonable cause for the omission. On the facts, the assessee's only income was share income from a firm, and the surrounding circumstances, including the dispute about the partnership, the dissolution arrangement, the omission in the later year's return, and the dropping of penalty proceedings for another year, supported the explanation that the default was not deliberate concealment. The eventual assessability of the share income did not by itself negate reasonable cause for not filing the return for the relevant year.

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Issues: Whether the assessee had reasonable cause for not furnishing the return for the assessment year 1961-62 and whether penalty for the default was exigible.

Analysis: The only source of income was share income from a firm, but the surrounding facts showed a bona fide belief on the assessee's part that no return was required for the relevant year. The omission to include the share income in the return for the later year, the dispute regarding the partnership, the dissolution arrangement, and the dropping of penalty proceedings for another year supported the explanation that the default was not deliberate concealment. The existence of the firm and the eventual assessability of the share income did not by themselves exclude reasonable cause for the failure to furnish the return.

Conclusion: The assessee had reasonable cause for the failure to furnish the return, and the penalty was not sustainable.

Ratio Decidendi: Penalty for failure to furnish a return cannot be sustained where the assessee establishes a bona fide belief amounting to reasonable cause, even if the income is later held assessable.

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