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6. In response to the show cause letter dated 29/11/2010 the Assessee has filed the reply vide letter dated 13/12/2010, wherein the assessee has mentioned that due to technical problems in computer system, the return of income was filed on 23/12/2008, with a delay of 74 days. The assessee had submitted before the Assessing Officer that while the assessee was preparing the Balance Sheet and Profit & Loss Account for the relevant financial year, suddenly some data files in the computer got corrupted due to viruses and in spite of continuous efforts by the computer technical persons to retrieve the data in time for filing the income tax return, problems persisted in computer systems. It was further submitted that even after trying for retrieval of the data for four days, the required data could not be retrieved and that the backed-up data were available only up to 31st January 2008 in the C.D. Therefore, the entire data for the two months period, February & March 2008, had to be entered into the computer system again. Subsequently, the data were again audited by the Statutory Auditors for finalizing the accounts. It was submitted that since the assessee has multi location sales points through C&F agents in 12 States in India and data pertaining to transactions with these sales points consist of third party claims for stock returns and expiries/breakages, substantial time was consumed for auditing the re-entered data and preparation of annual accounts. The assessee contended before the Assessing Officer that all these developments were beyond the control of the assessee and hence, there was a delay of 74 days in filing the Income Tax Return.

Sri S. Venkataiah =================

12. On the other hand, the learned AR reiterated the submissions which were made before the CIT(A).

13. We have heard both the parties and perused the material on record. In this case admittedly, the assessee filed the return of income on 23.12.2008. The due date for filing the return of income u/s. 139(1) of the Act for the assessment year under consideration in the case of the assessee is 31.10.2008. As such the return filed by the assessee is belated. In this the assessee claimed deduction u/s. 80IC of the Act which was disallowed by the Assessing Officer as the return of the assessee was not filed within the time as prescribed u/s. 139(1) of the Act. The assessee has given reasons for delay in filing the return of income that the assessee was preparing its accounts through computer and the computer got corrupted due to viruses and in spite of continuous efforts by the computer technical personnel to retrieve the data in time for filing the return of income, problem persisted in the system. By trying to retrieve the data for 4 days the required data could not be retrieved and the backed up data were available only up to 31st January, 2008 in the CD and the entire data for the two months period, February and March, 2008, had to be re-entered into the computer system again. On preparation of the final accounts and finalising of statutory audit it took a little extra time that resulted in belated filing of return of income. Thus there was a delay of 74 days in filing the return of income which is beyond the control of assessee. This was also confirmed by the statutory auditor vide his letter dated 20.3.2011. Being so, in our opinion there is a reasonable cause for filing the return of income belatedly and this is beyond the control of the assessee. When the substantial question of justice involved technicalities should be ignored. Further, we are supported by the order of the Tribunal in ITA Nos. 1231 & 1199/Hyd/2010 in the case of DCIT vs. M/s.