1979 (3) TMI 113

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..... , initiated penalty proceedings against the assessee under s. 271(1)(a) of the said Act. The assessee pleaded before the ITO that the assessee had applied for extension of time and the same was allowed upto 31st day of March, 1974. The ITO held that there was nothing on the record to show that the time was allowed to the assessee to file return upto 31st day of March, 1974 and that even the ITO's order granting time till 31st May, 1974 was not produced on the plea that the same was misplaced and not traceable. The ITO, therefore, rejected the contention of the assessee that the ITO had granted time till 31st day of March, 1974. 3. The assessee also pleaded that the accounts of the assessee were under audit and the audit report was receive .....

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..... ar Co. The Auditors certified by letter dt. 25th April, 1978 that they received the books of account from the assessee in the latter part of Jan., 1973, for audit and the audit work could not be completed before April, 1974 due to some reasons which were beyond their control. The AAC held that there was strong case for the delay upto 1974. He has also pointed out that the assessee took care to submit their accounts for audit in Jan., 1973, when the return was due on 15th Aug., 1973 and if the Auditors took long time to complete the audit in April, 1974, the assessee cannot be blamed for late submission of the return at least upto April, 1974. The AAC, therefore, held that the period of default upto 25th April, 1974 deserved to be condoned .....

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..... ble cause and that the assessee could not file one return and then subsequently rectify it on the basis of audited accounts. We, therefore, hold that the assessee had reasonable cause for waiting for the receipt of the audited accounts. 8. Now the AAC has taken a view that the assessee could have filed the return within five days when the assessee received the audited accounts from the Auditors on 25th April, 1974. The time of one month taken by the assessee for filing the return after the receipt of the audited report is a quite reasonable time. We, therefore, hold that there was reasonable cause for the delayed filing of the return by the assessee on 31st May, 74 and the AAC was not justified in holding that there was no reasonable caus .....

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