SABYASACHI MUKHARJI, J.

( 1 ) IN this reference under Section 256 (1) of the I. T. Act, 1961, the Tribunal has referred the following question to this court:"whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that penalty under Section 271 (1) was leviable in this case ?"the assessment year involved is 1970-71. The assessee was required to file its income-tax return by 30th June, 1970, for the assessment year 1970-71. The return, however, was filed on the 28th October, 1970. It was claimed before the ITO that the assessee had applied in Form No. 6 but no evidence could be produced in support of this claim. In the absence of any explanation, the ITO imposed a penalty of Rs. 10,386 under Section 271 (1) (a) of the I. T. Act, 1961. The ITO, as mentioned hereinbefore, did not take into consideration the application filed in Form No. 6, which was filed by the assessee, after the time for filing of the return had expired. The ITO proceeded to say that no evidence was produced by the assessee. The ITO did not say that he looked into the records and found that such an application was not filed. The ITO thereafter went on to observe that the assessee offered no explanation for the delay in filing the return. In the premises, it appears to us, the ITO proceeded to say that the assessee had offered no explanation for delay on the assumption that the return or the application in Form No. 6 was not filed.

( 2 ) THE assessee went up in appeal before the AAC. The AAC upheld the order of the ITO. He found that there was no evidence that the delay in filing the return was due to any reasonable cause. According to him, applying for an extension was not a reasonable cause and even this application was made on the 29th August, 1970, when the date for filing of the return had expired in June, 1970. The AAC did not admit any further evidence regarding the filing of the return or of the application in Form No. 6 and he, therefore, upheld the penalty. The AAC seems to have proceeded on the basis that the original evidence, viz. , the explanation, for the delay in filing the return, in Form No. 6 and he, therefore, upheld the penalty. The AAC seems to have proceeded on the basis that the original evidence, viz. , the explanation, for the delay in filing the return, in Form No. 6 was not produced before the ITO. When the matter came up in appeal before the Tribunal, it upheld the imposition of the penalty. Before the Appellate Tribunal, an affidavit of the partner of the assessee-firm was filed with a memo, of appeal where it was stated that the adjustment of the accounts was delayed due to the constant ill-health of the accountant of the firm. It was in these circumstances that an application in Form No. 6 had been filed. It was pointed out that the ITO had not at all considered the contentions of the assessee made in Form No. 6 and in that view of the matter, it was contended by the assessee, that the order was bad in law and could not be upheld. The satisfaction for the imposition of penalty was with the ITO and he could not be so satisfied without looking into the reasons advanced by the assessee. The Tribunal found that the application in Form No. 6 was filed after the due date had already passed and, therefore, the ITO was not under any obligation to take into consideration that application particularly when there was no prima facie valid ground mentioned in the application explaining the delay in filing the application for extension of time. The Tribunal, further, held that the assessee had 8 months' time to file the return, and as the assessee had not been able to do so there was no valid reason for the delay in the filing of the return. In the premises, the Tribunal upheld the order passed by the AAC. In these circumstances, the question as mentioned hereinbefore, was referred to this court. In the affidavit, as mentioned hereinbefore, the assessee stated as follows :"2. The income-tax return in res

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