These penalty appeals field by assessee against independent orders dt. 10th Oct., 1983 passed for asst. yrs. 1976-77 and 1977-78 by CIT (A), Jodhpur. assessee was firm of four partners. previous year for asst. yrs. 1976-77 and 1977-78 is Dewali Year and, therefore, for 1976-77, it ended by 2nd Nov., 1975 whereas for asst. yr. 1977-78, it ended by 22nd Oct., 1976. For asst. yr. 1976-77, IT return was due on 30th June, 1976, whereas for asst. yr. 1977-78, it was due on 30th June, 1977. Further, IT return for 1976-77 was filed actually on 29th Sept., 1976 and for 1977-78 it was filed on 15th Sept., 1977. Thus there was delay of two completed months in each of t h e assessment years under consideration. Admittedly, for asst. yr. 1977-78 extension was filed in Form No. 6, which was filed before ITO on 30th June, 1977 seeking extension upto 31st Aug., 1977 for asst. yr. 1977-78. However, it was stated that ITO rejected application on 6th Aug., 1977 and this fact was intimated to assessee 8th Aug., 1977. Notice under s. 271(1)(a)/274 was issued to assessee even before completing assessment for each of two assessment years under consideration and explanation of assessee as to why penalty should not be imposed for late filing of IT return was issued. For asst. yr. 1976-77, notice was served on assessee on 7th Feb., 1979, whereas for 1977-78 it was served on assessee on 19th March, 1979. Ultimately assessee filed its explanation on 5th Sept., 1980 for asst. yr. 1976-77 and similar explanation was filed for 1977-78 also. explanation put forward was that there was discrepancy in trial balance and it was not tallying and, thus, assessee was not able to finalize its account even though it had employed its accounts Shri Bradeprut and Shri Bababux. It is also one of reasons put forward that they are not able to locate difference in trial balance. In 1976-77, it is also stated that Form No. 6 was filed seeking for extension of time and that advance payment of tax was also paid. However, ITO rejected explanation and imposed penalty of Rs. 2,152 for 1976-77 and also Rs. 2,900 for 1977-78. Aggrieved by each of penalty orders, assessee went in appeal before CIT (A). CIT (A) confirmed penalties and dismissed appeals, by his separate orders dt. 10th Oct., 1983, hence these second appeals. We have heard Shri R. S. Dani, ld. representative for assessee and Shri A. P. Saxena, ld. departmental representative. After hearing both sides, we are of opinion that penalty should be allowed to stand. total income assessed for 1976- 77 was Rs. 1,18,090, whereas total income assessed was Rs. 1,61,070 for asst. yr. 1977-78. delay was only for two months. For 1977-78, Form No. 6 was already filed. However, its rejection was communicated only on 8th Aug., 1977, whereas return was filed on 15th Sept., 1977. reason for delay was stated to be that trial balance was not tallying. ld. CIT (A) demands proof of that fact. We are unable to know that sort of proof can be expected to be produced in that regard. Absence of finalisation of accounts before filing return by firm is sufficient and reasonable cause for delay in filing return, because firm has not only to fill up IT Form but also expected to append balance-sheet, P & L a/c and several statements along with it. error or discrepancy in trial balance should be found out and reconciled before any meaningful balance-sheet was to be filed. We are satisfied in his case that cause put-forward for delay is genuine. Further, even assuming that there was some minor latches or delay on part of assessee-firm, we hold that there was only technical or venial breach for which no penalty is called for. There is Authority of Supreme Court in Hindustan Steel Ltd. vs. State of Orissa (1972) 83 ITR 26 (SC) in support of our stand. In result, appeals are allowed and penalty of Rs. 2,152 for 1976-77 and Rs. 2,900 for 1977-78 are knocked off. *** HAZARIMAL LALOORAM v. INCOME TAX OFFICER