TMI Blog1978 (7) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... by a Government notification time for filing the return was extended till 15th August, 1967. The assessee did not file any return. Thereafter, a notice was sent under sub-s. (2) of s. 139 of the Act. The assessee did not pay any need even to the said notice and filed the return much after the expiry of the period of 30 days mentioned in the same. The ITO thereafter started proceedings for the levy of penalty. In response to a notice served under s. 274 of the Act, the assessee submitted an explanation. The explanation was not accepted by the ITO. He imposed a penalty of Rs. 54,490 under s. 271(1)(a) of the Act. The appeal filed by him to the AAC was also dismissed. Thereafter, he preferred a second appeal before the Tribunal. The Tribunal a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of penalty was not liable to be taken into consideration in order to calculate the tax payable for the purposes of the penalty under section 271(1)(a) read with sub-section (2) of section 271 ?" The said question is the subject-matter of decision in Income-tax Reference No. 1 of 1975. We will first take up Reference No. 493 of 1972. In support of the case of the assessee on the first question the learned counsel for the assessee contended that the penalty imposed for the default committed under sub-s. (1) of s. 139 would be deemed to have become ineffective with the issue of notice under sub-s. (2) of s. 139 and, as such, the I.T. authorities had no jurisdiction to impose any penalty for not having filed the return under s. 139(1) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not filed a return under sub-s. (1) of s. 139 is condoned. The legal consequences of the omission or failure to file the return under sub-s. (1) of s. 139 as well as that of not complying with the notice under s. 139(2) are dealt with in s. 271 of the I.T. Act. Section 271 is to be found in Chap. XXI dealing with penalties. Clause (a) of s. 271(1) and other provisions of this section, which are material for our purposes and as it stood at the relevant time, is as follows: " 271. (1) If the Income-tax Officer or the Appellate Assistant Commissioner, in the course of any proceedings under this Act, is satisfied that any person. (a) has without reasonable cause failed to furnish the return of total income which he was required to furnish u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e return has been furnished or if no return has been furnished it continues till the assessment is made. An assessee is liable to pay penalty under this provision for not having filed return voluntarily under sub-s. (1) of s. 139 even if he files a return subsequently in pursuance of a notice under sub-s. (2) of s. 139. It is not possible to interpret s. 271(1)(a) and to hold that with the service of notice under sub-s. (2) of s. 139 the default of an assessee of having not filed a voluntary return under sub-s. (1) of s. 139 stands automatically condoned. Recently, a Full Bench of this court had occasion to consider the question whether the return of income filed under sub-s. (4) of s. 139 was to be treated as a return filed within time a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if a return is filed after the expiry of the time given in the notice under sub-section (2) of section 139, another default takes place." The view taken by this court in the said case makes it clear that default committed by a person on account of the failure to furnish return under s. 139(1) is distinct and separate than the one of not filing a return in pursuance of notice under s. 139(2). It can be culled out from the said case that a default which takes place in respect of sub-s. (1) of s. 139 is not condoned in spite of a service of notice under sub-s. (2) of s. 139. In our view we are also supported by decisions reported in CIT v. Indra and Company [1971] 79 ITR 702 (Raj), CIT v. Hindustan Industrial Corporation [1972] 86 ITR 657 (D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Navalgundkar Co. v. CIT [1975] 98 ITR 675 (Kar)). This being so, the levy of interest for not filing the return does not have the effect of automatically extending the time. We are also unable to find any substance in the submission of the learned counsel for the assessee that since the interest in this case was charged for the belated return, the time for filing the return should be deemed to have been automatically extended and as the time stood extended, no penalty under s.271(1)(a) was imposable. It would be straining the language of s. 139 too far to hold that the time is automatically extended when interest is charged. Taking up the third question, it appears to us that the deposit of advance tax made by a partner in his indivi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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