TMI Blog1971 (2) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... file the return by September 30, 1963, but filed an application dated October 15, 1963, requesting the Income-tax Officer to extend time up to November 15, 1963, for filing the return. No order was passed on that application. The assessee filed the return on July 10, 1964. After completing the assessment, the Income-tax Officer issued notice under section 271(1)(a) of the Act to show cause why penalty against it should not be levied for the late filing of the return. The assessee gave some explanation for not filing the return within the time allowed under section 139(1) of the Act. The Income-tax Officer did not accept that explanation as a reasonable cause, which prevented it from filing the return in time, and accordingly levied penalty of Rs. 2,170 on the assessee under section 271(1)(a) of the Act. On appeal, the Appellate Assistant Commissioner reduced the penalty to Rs 2,129 and a further appeal to the Income-tax Appellate Tribunal ended in its dismissal. Hence this reference. The learned counsel, Sri Dasaradharami Reddy, appearing for the assessee contended that, (1) when the assessee had voluntarily filed the return of income under section 139(4) of the Act within th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... continued, but not exceeding in the aggregate 50% of the tax. On a plain reading of the above sections it is clear that any person who fails to file a return or fails to file a return within the time allowed under section 139(1) or fails to file it within the time allowed under section 139(2) of the Act without reasonable cause is liable to pay penalty. There is no provision in the Act which shows that penalty is not attracted in a case where penal interest is levied for the delay in filing the return. If that was the intention of the legislature, we would have certainly found a provision in the Act to the effect that penalty is not leviable for late filng of the return, where penal interest is levied for the delay. The argument of the learned counsel, Sri Dasaradharami Reddy, was that section 139 was a special provision and section 271(1), a general provision. To a case to which those sections apply, special provision must prevail over the general provision and action should be taken under the special provision and not under the general provision. If the provisions are not interpreted in that manner, it will lead to an absurd result. A man who fails to file a return will pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2(1). In either of these cases the Income-tax Officer has jurisdiction to levy a penalty for not filing a return in time. If a return has been filed, not in compliance with a notice under section 22(1), but after the expiry of the period prescribed in that notice, the mere fact that the return has not been accepted or that the assessee has concealed the particulars of his income or deliberately furnished inaccurate particular of such income does not preclude the Income-tax Officer from taking action under section 28(1)(a), if he so chooses." The scheme of the 1961 Act is that it is incumbent on every person, who has got assessable income to file his return of income under section 139(1) of the Act. The 1961 Act has dispensed with the general notice, which was required to be issued under section 22(1) of the Indian Income-tax Act, 1922. If in the opinion of the Income-tax Officer, a person has got assessable income, he may by notice require him to file a return of his income within 30 days from the date of service of such a notice. If that person still failed to furnish the return of his income in compliance with section 139(2) of the Act, the law gives to that person a further o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ars to use the language of mere permission, but it has been so often decided as to have become an axiom that in such cases such expressions may have--to say the least--a compulsory force, and so would seem to be modified by judicial exposition." Section 271(1)(a) of the Act is neither for the public good nor for the advancement of justice. In such a case the word "may" has to be understood as having no compulsory force. Therefore, the Income-tax Officer has got discretion to levy penalty under section 271(1)(a) at 2% of the tax for every month of default or less. The other argument advanced by the learned counsel was that in sub-clauses (ii) and (iii) of clause (c) of section 271(1) both the minimum and maximum penalties have been fixed. The language used in sub-clause (ii) of clause (c) of section 271(1) is, "a sum which shall not be less than 10%, but which shall not exceed 50% of the amount of tax". The language used in sub-clause (iii) of clause (c) of section 271 (1) is "a sum which shall not be less than, but which shall not exceed twice, the amount of income in respect of which particulars have been concealed or inaccurate particulars have been furnished." There is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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