Penalty for late return filing set aside where verification of delay and assessment circumstances remained incomplete.

Penalty for delay in filing the return under section 271(1)(a) could not be sustained on the existing record where the assessee had challenged the assessment position and the circumstances relevant to the levy required further verification. The return was admittedly late, but the appellate material was not fully verified and the cause for delay also needed examination. The penalty was therefore set aside and the matter remitted for fresh decision after verification, granting relief to the assessee.

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Issues: Whether the penalty imposed for delay in filing the return under section 271(1)(a) could be sustained when the assessment order had been objected to and the circumstances affecting the levy required further verification.

Analysis: The return was admittedly filed late and penalty proceedings were initiated. The assessee relied on the pending objection to the assessment and produced material suggesting that the assessment position needed reconsideration. The appellate record had not been fully verified, and the cause for delay also required examination. In these circumstances, the penalty could not be finally affirmed on the existing material and the matter required fresh consideration.

Conclusion: The penalty levy was set aside and the matter was remitted for fresh decision after verification, resulting in relief to the assessee.

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