Law:

Section:

Section 256, read with section 271(1)(a), of the Income-tax Act, 1961 - Reference - Question of fact - Whether where after considering material on record Tribunal had accepted explanation furnished by assessee for late filing of return and exercised its discretion in condoning delay in favour of assessee holding that there was reasonable cause for delay in filing return, finding of Tribunal was a pure question of fact and no referable question of law arose therefrom - Held, yes Facts The return for the relevant year had been filed by the assessee-firm with a delay of five months. The assessee submitted that the return could not be filed within time on account of illness of its 'munim' and further the delay was caused on account of the fact that it took some time to receive sale statements from its several branches, and prepare the accounts, and thereafter file the return. The ITO rejected the assessee's plea and, thus, imposed a penalty under section 271(1)(a). On appeal, the Tribunal, however, held that the detailed explanation given by the assessee was Quite reasonable. The assessee could not get the statements of sales from its branches within time as a result of which there was a delay in completing the books. The assessee's munim was also ill. In his absence, the account books could not be prepared and completed. The moment he became all right, the account books were completed and return was filed. In the present case, no notice under section 139(2) was issued by the department. The assessee filed the return voluntarily. From the aforesaid facts, it was clear that the conduct of the assessee had not been contumacious or dishonest. The Tribunal, therefore, deleted the penalty imposed by the ITO. The Tribunal further rejected the revenue's application for reference under section 256(1). On application for reference under section 256(2): Held Once the order of the Tribunal exercising the discretion regarding the reasonableness of the cause for delay in filing the return is based on grounds and material on the record, it cannot be said that the order is perverse. It may be pointed out that the absence of evidence or material is one thing, while sufficiency…

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