Dwarka Prasad, J.
1. The Commissioner of Income-tax, Rajasthan, Jaipur Circle, Jaipur, prays that the following questions said to be arising out of the order of the Income-tax Appellate Tribunal be got referred to this court :
' (1) Whether, under the facts and circumstances of the case, the Tribunal was justified in setting aside the order of penalty
(2) Whether there was any evidence on record to prove that the sale statements from the branches were received late and what was its reason
(3) Whether there was any evidence on record to prove that Shri Ramniwas Dhamani, assessee's munim, remained ill throughout the period of delay in submitting the return
(4) Whether the Tribunal was correct in rejecting the Department's appeal under the facts and circumstances of the present case '
2. The assessee, M/s. New Friends & Co., Jaipur, was a registered firm and carried on business in sale of liquor. The return for the assessment year 1968-69 which should have been filed on or before September 30, 1968, by the assessee, was filed late on March 1, 1969, and thus there was a delay of five months in filing of the return. While completing the assessment proceedings, the Income-tax Officer initiated penalty proceedings against theassessee under Section 271(1)(a) of the Income-tax Act, 1961. The explanation furnished by the assessee was not considered to be satisfactory by the Income-tax Officer and he imposed a penalty in the sum of Rs. 43,540, vide order dated July 29, 1974. The assessee then preferred an appeal before the Appellate Assistant Commissioner and submitted that the return could not be filed within time on account of illness of the ' munim ' of the assessee who used to prepare the accounts and further, the delay was caused on account of the fact that the assessee-firm had ten branches, and it took some time to receive the sale statements from the branches and prepare the accounts, and thereafter file the return. The Appellate Assistant Commissioner held that the assessee was prevented by reasonable cause from filing the return as the ' munim ' of the assessee was hospitalised for about one month. He, therefore, condoned the delay for one month only. But, according to him, there was no sufficient ground in respect of the delay for the remaining four months.
3. The Department as well as the assessee filed appeals against the order passed by the Appellate Assistant Commissioner of Income-tax before the Income-tax Appellate Tribunal and both the grounds in support of reasonable cause for the delay in filing the return were urged on behalf of the assessee before the Appellate Tribunal. The Appellate Tribunal accepted the explanation of the assessee and held that there was reasonable cause for the delay which occurred in filing the return by the assessee. The Tribunal consequently dismissed the appeal filed by the Department and accepted the appeal filed by the assessee and set aside the penalty, vide its order dated April 10, 1977.
4. An application filed by the Commissioner of Income-tax before the Tribunal for making a reference to this court, was rejected by its order dated August 30, 1977, on the ground that the finding arrived at by the Tribunal on the question of reasonableness of delay, was purely a finding of fact and no question of law arose out of the order of the Tribunal. Under these circumstances, the Commissioner of Income-tax has filed the present application under Section 256(2) of the Income-tax Act before this court.
5. The learned counsel for the Revenue argued before us that the order passed by the Appellate Tribunal accepting that the delay in filing the return of the assessee was reasonable, is perverse, as there was no material to support such a finding. The finding of the Appellate Tribunal on this question as to whether the assessee had been able to make out sufficient cause for the delay in filing the return, is as under :
' We have heard the parties and perused the material available on record. The detailed explanation given by the assessee is quite reason-able. 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 Ms absence, the account books could not be prepared and completed. The moment he became all right, the accounts 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 is clear that the conduct of the assessee has not been contumacious or dishonest. Thus, in our opinion, no penalty is called for. '
6. Thus, it appears that the Tribunal took into consideration the two circumstances placed before it by the assessee, namely, that the ' munim ' of the assessee who used to prepare the accounts had fallen ill and in his absence, the accounts could not prepared and completed; and in the second place, the Tribunal also accepted the explanation furnished by the assessee that there were a number of branches of the assessee-firm and the statements of sale from those branches could not be collected within the time and after the sale statements were received by the assessee, the accounts were completed and thereafter the return was filed. It was also held by the Tribunal that the conduct of the assessee was neither contumacious nor dishonest, and also the fact that the assessee voluntarily filed its return, although delayed, showed its bona fides.
7. 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 thereof is quite another thing. In the present case, it cannot be held that there was no material on the face of which the Tribunal could have come to the conclusion that there was reasonable cause for delay in filing the return by the assessee. It may be quite different to say that there might be two opinions on the question of sufficiency of cause shown by the assessee. Once the Tribunal has accepted the explanation furnished by the assessee and exercised its discretion in condoning the delay in favour of the assessee holding that there was reasonable cause for the delay in filing the return, the finding of the Tribunal is a pure finding of fact. In our view, no question of law arises out of the finding arrived at by the Tribunal on the question of reasonable cause for the delay in filing the return by the assessee.
8. In CIT v. Tara Trading Co. : 123ITR97(Orissa) , it was held that where there was a clear finding of fact by the Tribunal that there was sufficient cause for the delay in furnishing the returns, the Tribunal was justified in exercising its discretion in favour of the assessee. It was alsoobserved therein that the burden in respect of showing reasonable cause could be discharged by the assessee on proof of facts and circumstances and by preponderance of probabilities as in a civil case. It was also observed in the aforesaid case that even if the assessee had failed to furnish his explanation before the Income-tax Officer, it was open to him to place materials for the first time before the Appellate Assistant Commissioner who could record his satisfaction for existence of reasonable cause, and once the Tribunal had held that there was sufficient cause for the delay, the matter was concluded by a finding of fact.
9. In Addl. CIT v. Aggarwal Misthan Bhandar , a Bench of this court, while holding that when the Tribunal has exercised its discretion in accepting the explanation of the assessee for the delay in filing the return, observed that no question of law arose out of the order of the Tribunal. In that case, this court observed as under (at p. 622):
' It was for the Tribunal to accept the explanation given by the assessee to be correct or not. In the facts and circumstances of the case, if the explanation submitted by the assessee has been accepted by the Tribunal, it is a. question of fact which lies within the discretion of the Tribunal and no question of law arises out of such discretion exercised by the Tribunal. It cannot be said that the opinion of the Tribunal in this regard was based on no evidence, or was against some statutory provisions of law. '
10. A similar view was also taken by the Allahabad High Court in Addl. CIT v. Jai Jawan Radios : 146ITR504(All) , wherein it was held that the evidence before the Tribunal may be direct or circumstantial and even when circumstantial evidence formed the basis for the conclusion of the Tribunal, no question of law arose out of the order of the Tribunal.
11. In Addl. CIT v. Gem Palace , it was held by a Bench of this court that when the Appellate Tribunal came to the conclusion on the basis of which the penalty was cancelled, it was a pure finding of fact and no question of law arose.
12. In view of the fact that the Appellate Tribunal in the present case accepted the explanation furnished by the assessee regarding the delay in riling the return and held that there was reasonable cause for the delay and further that the conduct of the assessee was neither contumacious nor dishonest, we agree with the Appellate Tribunal that the aforesaid finding is a pure finding of fact and no question of law arises in this case.
13. The reference application is, therefore, rejected, but without any order as to costs.