1984 (8) TMI 43 - HC - Income Tax

Summary

Issues:
- Appeal against penalty imposed under section 271(1)(a) for default under section 139(2)
- Calculation of penalty period for default under section 139(1)

Analysis:
The case involved an appeal against a penalty imposed by the Income-tax Officer under section 271(1)(a) for default under section 139(2) of the Income Tax Act, 1961. The assessee, a firm, was penalized Rs. 6,110 for delayed submission of the return for the assessment year 1966-67. The Income Tax Officer rejected the explanation provided by the assessee regarding the submission of the return and imposed the penalty. The assessee contended that no notice under section 274 was served, and the penalty proceedings were not initiated during the assessment. The Appellate Assistant Commissioner (AAC) upheld the penalty, stating that the assessee was a defaulter and confirmed the penalty imposed by the Income Tax Officer. The Tribunal also upheld the penalty, considering the default in submitting the return without a valid cause. The Tribunal relied on a previous case and upheld the order of the AAC.

The parties presented arguments regarding the imposition of penalty under section 139(1) for non-compliance with the notice under section 139(2). The Income Tax Officer imposed the penalty under section 139(1) for the default in submitting the return. Both parties acknowledged the penalty imposed under section 139(1). The intention of the Income Tax Officer was clarified, indicating that the penalty was imposed for non-compliance with the notice under section 139(2). The Appellate Tribunal and the AAC upheld the penalty for delayed submission of the return under section 139(1.

The judgment referred to a previous case law stating that once a notice under section 139(2) is issued, no penalty under section 271(1)(a) can be imposed for failure to furnish the return under section 139(1). However, the judgment in the present case differed from the previous decision, aligning with a Full Bench decision in another case. The court held in favor of the Revenue, stating that the Tribunal was correct in sustaining the penalty for the period of default under section 139(1) in the appeal against the penalty imposed for non-compliance with the notice under section 139(2). The court also mentioned that each party would bear their own costs in this case.