Penalty for late return filing requires deliberate defiance of law, not merely an unsatisfactory explanation.

Penalty for delay in filing a return under section 271(1)(a) was held unsustainable where the assessee had sought extensions and filed the return shortly after the extended period. The absence of material showing deliberate withholding, conscious disregard of the statutory duty, or contumacious conduct meant that late filing could not by itself justify penalty. A merely prima facie unreasonable explanation was insufficient; the penalty provision required a finding of deliberate defiance of law or dishonest conduct. On these facts, the penalty was cancelled in favour of the assessee.

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Issues: Whether penalty under section 271(1)(a) of the Income-tax Act, 1961 was leviable for delay in filing the return.

Analysis: The assessee had sought extensions of time and filed the return shortly after the extended period. On the facts, there was no material to show deliberate withholding of the return, conscious disregard of statutory duty, or contumacious conduct. Penalty for late filing could not be sustained merely because the explanation was treated as prima facie unreasonable; it required a finding of deliberate defiance of law or dishonest conduct.

Conclusion: Penalty under section 271(1)(a) was not justified and was cancelled in favour of the assessee.

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