COMMISSIONER OF INCOME TAX Vs. AMINCHAND PAYARELAL LTD

JUDGEMENT

(1.) In this reference, under Section 256(2) of the Income-tax Act, 1961, the following questions of law for the assessment year 1967-68, have been referred in this court:

(2.) Whether, on the facts and in the circumstances of the case and, in view of the fact that notice under Section 139(2) has been served on the assessee, the Tribunal misdirected itself in law in holding that the assessee had no obligation to file the return inasmuch as it bona fide believed that its total income will be less than the maximum not chargeable to tax ?"

(3.) The facts shortly stated are that the return of income of the assessee for the assessment year under reference was due under Section 139(1) of the Act on or before September 30, 1967. The assessee did not file any return by the due date. A notice under Section 139(2) was served upon the assessee on July 27, 1967, asking it to file the return within 30 days of the date of service of the notice. The assessee filed the return on June 17, 1969, declaring a loss of Rs. 29,008. The assessment was, however, made on an income of Rs. 2,15,415. After the revision made by the Commissioner of Income-tax under Section 264 of the Act, the total income was determined at Rs. 1,19,319. A notice under Section 274 read with Section 271 was issued to the assessee on February 5, 1968, asking the assessee to show cause why penalty under Section 271(1)(a) should not be levied on it.