Advance-tax penalty fails where the specific default is unclear and the assessee shows reasonable cause for the estimate.

Penalty for an alleged advance-tax default could not be sustained where the order failed to identify the precise lapse on which it was based. The assessee had filed the estimate on the basis of disclosed income, and the additions to income provided a reasonable basis for that estimate on the returned/book result. On those facts, the statutory conditions for penalty were not met, as the specific default was not clearly established and reasonable cause was not disproved. The penalty was therefore cancelled.

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Issues: Whether the penalty imposed for alleged default relating to advance tax was sustainable where the default was not clearly identified and the assessee had filed an estimate on the basis of disclosed income.

Analysis: The penalty order referred to different defaults and did not clearly pinpoint the exact lapse on which penalty was founded. Even otherwise, the additions made to the assessee's income provided a reasonable basis for filing the advance-tax estimate on the returned/book result, showing sufficient cause for the estimate submitted. In these circumstances, the statutory conditions for sustaining penalty were not satisfied.

Conclusion: The penalty was not sustainable and was directed to be cancelled.

Ratio Decidendi: A penalty for default connected with advance tax cannot be sustained unless the specific default is clearly identified and the absence of reasonable cause is established.

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