R LAKSHMINARAYANA REDDIAR Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE matter relates to the assessment year 1962-63. Admittedly, the assessee did not file a voluntary return as required by s. 139(1) of the I.T. Act, 1961 (hereinafter, referred to as "the Act"). A notice was issued under s. 139(2) read with s. 148 of the Act, calling upon the assessee to file the return of income on February 8, 1966. THEreafter, the ITO issued a show cause notice calling upon the assessee to explain why a penalty should not be levied for his failure to furnish the return under s. 139(1) of the Act. THE assessee offered his explanation, but the ITO held that the assessee had no reasonable cause for not filing the return as required by s. 139(1) of the Act and levied a penalty of Rs. 8, 607. THE assessment as well as the levy of penalty were taken up in appeal to the AAC, who reduced the quantum of tax and consequently reduced the penalty to Rs. 5, 545. Against the order of the AAC, the assessee took up the matter in further appeal to the Tribunal, and before the Tribunal the assessee contended that once the ITO issued a notice under s. 139(2) of the Act and the assessee had filed the return in response to that notice, no penalty could be levied against the assesee under s. 139(1), because after the filing of the return pursuant to the notice issued under s. 139(2) of the Act, there is no default on the part of the assessee.

(2.) THE Tribunal rejected the said contention of the assessee and dismissed the appeal. Subsequently, the assessee applied, under s. 256(1) of the Act, for a reference of the following question for the opinion of this court and the Tribunal has referred the same "Whether, on the facts, and in the circumstances of the case, the Tribunal was right in holding that the default under section 139(1) was independent of section 139(2) of the Income-tax Act, 1961, and the same survived after the applicant had complied with a notice under section 139(2) of the Act ?" *We shall first refer to the relevant statutory provisions and express our view on the construction of those statutory provisions and thereafter examine the decisions of courts bearing on the same. Section 139(1) of the Act reads as followsSection 139(1)"Every person, if his total income or the total income of any other person in respect of which he is assessable under this Act during previous year exceeded the maximum amount which is not chargeable to income-tax, shall furnish a return of his income or the income of such other person during the previous year in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed--(a) in the case of every person whose total income, or the total income of any other person in respect of which he is assessable under this Act, includes any income from business or profession, before the expiry of six months from the end of the previous year or where there is more than one previous year, from the end of the previous year which expired last before the commencement of the assessment year, or before the 30th day of June of the assessment year, whichever is later (b) in the case of every other person, before the 30th day of June of the assessment yearProvided that, on an application made in the prescribed manner, the Income-tax Officer may, in his discretion, extend the date for furnishing the return--(i) in the case of any person whose total income includes any income from business or profession the previous year in respect of which expired on or before the 31st day of December of the year immediately preceding the assessment year, and in the case of any person referred to in clause (b) up to a period not extending beyond the 30th day of September of the assessment year without charging any interest (ii) in the case of any person whose total income includes any income from business or profession the previous year in respect of which expired after the 31st day of December of the year immediately preceding the assessment year, up to the 31st day of December of the assessment year without charging any interest and(iii) up to any period falling beyond the dates mentioned in clause(i) and (ii), in which case, interest at six per cent. per annum shall be payable from the 1st day of October or the 1st day of January, as the case may be, of the assessment year to the date of the furnishing of the return--(a) in the case of a registered firm or an unregistered firm which has been assessed under clause (b) of section 183, on the amount of tax which would have been payable if the firm had been assessed as an unregistered firm, and(b) in any other case, on the amount of tax payable on the total income reduced by the advance tax, if any, paid or by any tax deducted at source, as the case may be."Section 139(2) of the Act is as follows" In the case of any person who, in the Income-tax Officer's opinion, is assessable under this Act, whether on his own total income or on the total income of any other person during the previous year, the Income-tax Officer may, before the end of the relevant assessment year, serve a notice upon him requiring him to furnish, within thirty days from the date of service of the notice, a return of his income or the income of such other person during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribedProvided that on an application made in the prescribed manner the Income-tax Officer may, in his discretion, extend the date for the furnishing of the return, and when the date for furnishing the return, whether fixed originally or on extension, falls beyond the 30th day, of September or, as the case may be, the 31st day of December of the assessment year, the provisions of sub-clause (iii) of the proviso to sub-section (1) shall apply."Section 139(7) reads as follows" No return under sub-section (1) need be furnished by any person for any previous year, if he has already furnished a return of income for such year in accordance with the provisions of sub-section (2)." *Section 147 of the Act deals with the procedure for assessing escaped income and in that context s. 148(1) reads as follows