R.C. RUSTAGI, J.M.: two grounds raised in this appeal by assessee are in respect of levy of penalty for late filing of return under s. 271(1)(A) which was made by ITO and confirmed by AAC. assessee is commission agent in fruits. assessment year involved is 1976-77. return was to be filed on 31st of July, 1976 whereas it was actually filed on 28th Feb., 1977. assessee had sought extension of time in form 6 as their books of accounts were not complete. In said application, time was sought up to 30th Nov., 1976. ITO had rejected said extension application and in observation made to this effect in one line in his order, ITO observed explanation filed by assessee has been duly considered, and levied penalty in sum of Rs. 5320 at rate of 2 per cent per month of tax for penalty. After matter came before AAC, he confirmed said penalty observing that delay in filing return is admitted. There is no reasonable cause to explain delay and application for extension was also rejected. He did not find any evidence in support of assessee's contention and, therefore, confirmed imposition of penalty. learned counsel for assessee submitted while disputing said order that assessee is commission agent in fruits and total turn-over runs over crore of rupees as commission receipt had been shown in sum of Rs. 1,21,711. He submitted that difference in trial balance of concern of this type was natural and assessee's request for explanation was rejected without reason. learned DR on other hand, relied on order of two lower authorities. After taking into consideration rival submissions and looking to facts, we are unable to sustain penalty in question. There is no controversy about fact that assessee has been doing commission agency business in fruits. There was difference in trial balance and to that effect assessee had applied for extension till Nov., 1976. ITO not only rejected said extension application but in his order levying penalty, he only mentions "explanation filed by assessee had been duly considered". This mention is in very "matter of fact" style. Then order of AAC is also equally sketchy. He Mentions that, "I, therefore, fell that appellant was not prevented by sufficient cause for not filing return in time." Looking to volume of assessee's business and total commission receipts in sum of Rs. 1,21,000 which by itself supports huge turn-over of constituents at hands of assessee, difference in trial balance could not be ruled out and once explanation was given by assessee, it was for Department to have substantiated same to be false. Under circumstances, penalty is hereby cancelled and in result, appeal of assessee is allowed. Narayanan (Vice-President): facts on record as detailed in paragraph 2 of my learned brother's order, show that assessee has shown reasonable cause for default. In light of this finding of fact, there is no room for penalty under s. 271(1)(a) of IT Act. I, therefore, agree with my learned brother, that penalty in question would stand cancelled. *** LAKSHMI DAS AND SONS v. INCOME TAX OFFICER