Reasonable cause for late return filing defeated penalty where delay was attributable to the chartered accountant's office.

Penalty for late filing was held not leviable where the assessee had acted with reasonable diligence by handing over the books of account to the chartered accountant in time, and the delay arose in the auditor's office. On those facts, the assessee's explanation constituted sufficient cause, and there was no evidence of recalcitrance or lack of bona fides. The default was therefore excused and the penalty was deleted.

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Issues: Whether penalty for late filing of the return was exigible when the assessee had handed over the books of account to the chartered accountant in time and the delay occurred in the auditor's office.

Analysis: The material on record showed that the assessee had acted with reasonable diligence and had taken steps to comply with the statutory filing requirement within time by delivering the books to the representative for audit. The delay was attributable to the office of the chartered accountant and not to any recalcitrance or lack of bona fides on the part of the assessee. On these facts, the explanation constituted sufficient cause for the default and did not justify levy of penalty.

Conclusion: The penalty was not leviable and the assessee succeeded on the issue.

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