A return which does not comply with the requirements of Rule 12(1)(b)(i) of the Income-tax Rules, 1962, and does not contain the statements of accounts required by Part VI of Form No. 2, is not a valid return.

1. This is a reference under Sec.256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"). The questions, referred to us, for our opinion, are as follows :

"1. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the first return filed on May 31, 1972, was a valid return though it was not accompanied by the statement of accounts supporting the income shown in the return ?

2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that an application for extension of time made on September 30, 1971, but received in the Income-tax Office on October 1, 1971, could be considered in deciding the question of reasonableness for the delay in filing of the return ?"

2. In this reference, we are concerned with the assessment year 1971-72. The due date for filing the return was October 30, 1971. Application for extension of time to file the return was filed on October 1, 1971. Although the application bears the date September 30, 1971, the finding is that it had been filed on October 1, 1971. A return for the relevant assessment year was filed on May 31, 1972, showing an income of Rs. 80,000 by estimate. It appears that it was realised by the assessee himself that the return filed by him was defective for various reasons. A revised return was, therefore, filed on March 17, 1973, showing the total income of Rs. 1,03,470. The returns having been filed beyond the due date, a penalty proceeding in terms of Sec.271(1)(a) was initiated. The Income-tax Officer held that the return filed on May 31, 1972, was no return as it lacked the necessary particulars. He, therefore, levied penalty for 17 months delay in filing the return. A sum of Rs. 28,626, being 2% of the tax of Rs. 84,194, was imposed. The firm was treated as an unregistered firm. On appeal, the Appellate Assistant Commissioner considered the plea of the assessee for not filing the return within time. In that behalf, he examined the reasonableness for the delay in filing the return. The Appellate Assistant Commissioner applied himself to the pleas advanced by the assessee. Upon full consideration, he held that no reasonable cause had been shown for late filing of the return. The finding is in the following words :

"Therefore, I have to come to the irresistible conclusion that the application for extension of time was sought for in routine manner and the cause shown for the delay or for seeking extension of time is not at all reasonable."

3. This finding, that there was no reasonable cause for late filing, has not been upset by the Income-tax Appellate Tribunal. Suffice it to say, the Appellate Assistant Commissioner dismissed the appeal of the assessee without any modification.

4. The assessee, being aggrieved by the order of the Appellate Assistant Commissioner, filed an appeal before the Tribunal. The Tribunal also proceeded on the footing that the application for extension of time had been filed on October 1, 1971. Nothing has been brought to our notice indicating that the application had been filed earlier. We shall, therefore, also proceed on the basis of the fact that the application for extension of time had been filed on October 1, 1971. The Tribunal, however, considered the question of reasonable cause for late filing of the return from an entirely different angle. It observed that the assessee having filed an application for extension of time on October 1, 1971, although beyond time, may have left the assessee under the impression that time had been extended till March 31, 1972, as prayed for by him. The Tribunal was, therefore, of the view that there was reasonable cause uptil March 31, 1972, for not filing the return. In regard to the delay beyond March 31, 1972, the plea of the assessee was rejected by the Tribunal as well. The Tribunal, therefore, modified the order of penalty. Since the first return had been filed on May 31, 1972, the penalty would be leviab