9911796707
TMI Blog1998 (10) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... what we are in fact called upon to answer is whether service of notice on the assessee under section 139(2) wipes off the default committed by him in filing the return under section 139(1) of the Act. There are divergent views expressed by two Division Benches of this court in Addl. CIT v. Rampratap Shankarlal [1979] 117 ITR 662 and Chunnilal and Bros. v. CIT [1979] 119 ITR 199, on the issue and hence it becomes necessary to have a fresh look at the matter, if only to take sides with one or the other judgment. The facts giving rise to the present controversy are that the assessee failed to file the return of his income under section 139(1) till the deadline, i.e, June 30, 1974. The Income-tax Officer naturally put it on notice under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the later judgment of this court in Chunnial and Brothers' case [1979] 119 ITR 199. It all comes to which of the two judgments should be followed. A difficult choice to make indeed. Though it is not for us to pick out holes in either judgment, it does not debar us from opting for the one which represents a widely accepted view. At this stage, it would be advantageous to survey and examine the relevant provisions having bearing on the matter. Section 139(1) casts an obligation on the assessee to file a return of his income before the specified date depending upon the adopted accounting system. If he fails, the Income-tax Officer is empowered under section 139(2) to serve a notice requiring the assessee to file the return within 30 days fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lt under section 139(1) comes to an end as soon as notice under section 139(2) is served on the assessee." As against this, the judgment in Chunnilal and Brothers' case [1979] 119 ITR 199 (MP), proceeds on a different reasoning and finds support in the judgments of various High Courts including those of Rajasthan, Bombay, Madras, Orissa and Allahabad. It rules that a default made under section 139(1) ceases only on filing of the return in answer to a notice under section 139(2) or under section 139(4) and that this default is neither arrested nor wiped out on notice being issued under section 139(2) and that it attracts levy of penalty under section 271(1)(a) in both cases. The reason advanced is that once the default commences under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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