B.S.DHILLON, J.

1. The facts giving rise to these references are that a notice under s. 22(2) of the Indian I.T. Act, 1922 (hereinafter called "the Act"), was served on the assessee for the assessment year 1961-62. In compliance with the said notice, the return was furnished by the assessee on of June 13, 1962, which was due to be furnished by of June 25, 1961. Thus, a delay of 11 complete months was involved. The ITO initiated penalty proceedings against the assessee for late furnishing of the return. The assessee furnished a written explanation.

2. The assessee was a partnership firm. One of the contentions raised by the assessee during the said penalty proceedings was that the assessee-firm as also the partners thereof individually had paid not only advance tax as due under s. 18A of the Act, but also the tax that fell due on completion of the provisional assessment under s. 23B of the Act. The ITO overruled the explanation and came to the conclusion that there was no reasonable cause for the delay in filing the return and, consequently, a penalty of rs. 63,602 was imposed by him under s. 271(1)(i) of the Act.

3. On appeal, the AAC reduced the penalty from Rs. 63,602 to