Reasonable cause defeats penalty for belated gift-tax return where delay was only a technical breach.

Penalty for belated filing of a gift-tax return was held not leviable where the assessee showed reasonable cause for the delay. The return was filed after due date, but the assessee had already disclosed the gift deed in proceedings under section 230A and later filed the return voluntarily on professional advice. On these facts, the conduct was treated as a technical breach rather than deliberate defiance, dishonest intention, or contumacious disregard of statutory obligations, so the penalty order was cancelled.

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Issues: Whether penalty was leviable for belated filing of the gift-tax return in the absence of reasonable cause.

Analysis: The return, though filed after the due date, was subsequently explained before the appellate authority. The explanation was that the assessee had disclosed the relevant gift deed in proceedings under section 230A and later filed the return voluntarily after receiving professional advice. The conduct did not show deliberate defiance of law, dishonest intention, or contumacious disregard of statutory obligations. On these facts, the delay was treated as at most a technical breach and reasonable cause was accepted.

Conclusion: Penalty under section 17(1)(a) was not leviable and the assessee succeeded on the issue.

Final Conclusion: The penalty order was cancelled because the belated return was found to be supported by reasonable cause and not by contumacious or dishonest conduct.

Ratio Decidendi: Penalty for delayed filing is not justified where the assessee shows reasonable cause and the conduct does not indicate deliberate or contumacious default.

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