Penalty for late return filing was cancelled after the assessee showed a reasonable explanation and no deliberate default.

Penalty for delay in filing a return under Section 271(1)(a) was held unwarranted where the assessee gave a detailed explanation based on non-receipt of share income from firms, ill-health, and counsel's inadvertence. The explanation was found reasonable and probable, was not shown to be false, and the Revenue produced no positive material to prove conscious disregard of the filing obligation. The assessment income was substantially accepted, and the absence of notice under Section 139(2) was also noted. On these facts, the penalty was cancelled.

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Issues: Whether penalty for delay in filing the return under Section 271(1)(a) of the Income-tax Act, 1961 was leviable when the assessee attributed the delay to non-receipt of share income from firms, ill-health, and inadvertence of counsel.

Analysis: The assessee had furnished a detailed explanation for the belated return. The explanation was found to be reasonable and probable, was never shown to be false, and no positive material was brought by the Revenue to establish conscious disregard of the statutory obligation. The return income was substantially accepted, and the absence of a notice under Section 139(2) was also noticed.

Conclusion: Penalty under Section 271(1)(a) was not justified and was cancelled.

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