Reasonable cause for delayed return filing avoided penalty where extension requests were unanswered and belief in approval was bona fide.

Penalty for late filing of a return was held not leviable where the assessee had sought extension of time and no order or communication rejecting those applications was made. The assessee was entitled to form a bona fide belief that the requested extension had been allowed, and that reasonable cause explained the delay. On that basis, the penalty under section 271(1)(a) of the Income-tax Act, 1961 was cancelled and the cancellation was upheld.

---

---

Issues: Whether penalty under section 271(1)(a) of the Income-tax Act, 1961 was leviable for delay in filing the return where the assessee had applied for extension of time and no order was communicated on those applications.

Analysis: The return was filed after the due date prescribed under section 139(1), but the assessee had submitted two applications seeking extension of time. No order was passed by the Income-tax Officer and no communication was made to the assessee regarding the fate of those applications. In that situation, the assessee could reasonably entertain a bona fide belief that the time sought had been allowed. Such belief constituted reasonable cause for the delay.

Conclusion: Penalty was not leviable under section 271(1)(a) of the Income-tax Act, 1961. The cancellation of penalty was upheld and the assessee succeeded.

---