Bona fide defective return avoided penalty where the assessee showed intent to comply and delay was explained by sufficient cause.

An unsigned return filed within time, later followed by a signed return after the due date, did not attract penalty under section 271(1)(a) because the defect was treated as a bona fide inadvertent mistake rather than a culpable default. The Department had treated the return as valid for nearly a year and acted on it by issuing notices under sections 143(2) and 142(1), which supported the view that the assessee intended to comply. The later delay was found to be explained by sufficient cause. Penalty was therefore cancelled and the assessee succeeded.

---

---

Issues: Whether penalty under section 271(1)(a) of the Income-tax Act, 1961 was leviable for filing an unsigned return within time, later followed by a duly signed return filed after the statutory due date.

Analysis: The return was filed within time but remained unsigned, and the Department treated it as valid for about a year and acted upon it by issuing notices under sections 143(2) and 142(1) of the Income-tax Act, 1961. The omission was found to be a bona fide or accidental mistake rather than a culpable default. The later signed return, though filed after the due date, was regarded as having been delayed with sufficient cause in the circumstances.

Conclusion: Penalty under section 271(1)(a) was not leviable and was liable to be cancelled, in favour of the assessee.

Final Conclusion: The appeal succeeded and the penalty order was set aside.

Ratio Decidendi: A bona fide inadvertent defect in a return, when the assessee otherwise shows an intention to comply and the delay is explained by sufficient cause, does not justify penalty for late filing.

---