Reasonable cause for late return filing defeats penalty where accounts could not be finalised without consignee confirmations.

Penalty for belated filing was not warranted where the return was delayed because the assessee could not finalise accounts until confirmation letters and statements were received from outstation consignees concerning commission, brokerage and related consignment expenses. The short delay, the assessee's request for extension, absence of any material showing deliberate withholding of tax, and payment of tax as demanded supported a finding of bona fide and reasonable cause. On that basis, the Tribunal treated the default as explained rather than contumacious, and held that the penalty was not sustainable.

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Issues: Whether penalty under section 271(1)(a) of the Income-tax Act, 1961 was exigible for belated filing of the return when the delay was attributed to pending confirmation letters and statements from consignees needed for finalisation of accounts.

Analysis: The delay was short. The assessee had sought extension of time. The Tribunal accepted that the accounts could not be finalised until confirmation letters and statements were received from outstation consignees regarding commission, brokerage, and related expenses on consignment sales. The absence of material showing any deliberate withholding of tax and the fact that tax had been paid as demanded supported the view that the delay was not contumacious but was explained by a bona fide difficulty in completing the accounts and return.

Conclusion: The assessee had reasonable cause for the delay and the penalty was not sustainable.

Ratio Decidendi: Where belated filing of the return is satisfactorily explained by a bona fide and reasonable inability to finalise accounts, and there is no indication of deliberate default, penalty for late filing is not warranted.

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