1978 (4) TMI 96 - HC - Income Tax

Summary

Issues Involved:
1. Whether the return of income filed u/s 139(4) is to be treated as a return filed within time.
2. Whether the assessee was legally liable to penalty u/s 271(1)(a).

Summary:

Issue 1: Return of Income Filed u/s 139(4)
The court examined whether a return filed u/s 139(4) could be considered as filed within the time prescribed by u/s 139(1). The court noted that Section 139 provides three periods of limitation for filing a return: within the time allowed under sub-section (1), within the time allowed under sub-section (2) if a notice is issued, and within four years from the end of the assessment year under sub-section (4). The court emphasized that sub-section (4) does not act as a proviso to sub-section (1) or (2) and does not extend the time allowed by these sub-sections. The court concluded that a return filed u/s 139(4) is not to be treated as a return filed within the time prescribed by u/s 139(1).

Issue 2: Liability to Penalty u/s 271(1)(a)
The court analyzed the applicability of penalty u/s 271(1)(a) for failure to furnish returns within the time allowed by u/s 139(1) or (2). The court explained that clause (a) of section 271(1) deals with two situations: failure to furnish the return and failure to furnish it within the time allowed. The court clarified that penalty becomes imposable the moment the default occurs, either by not filing the return at all or by filing it beyond the time allowed by sub-section (1) or (2). The court rejected the contention that filing a return within the time prescribed by sub-section (4) exempts the assessee from penalty for violating sub-section (1) or (2). The court held that the assessee was legally liable to penalty u/s 271(1)(a) for not filing the returns within the time prescribed by u/s 139(1).

Conclusion:
The court answered the first question in the negative, against the assessee and in favor of the department, and the second question in the affirmative, in favor of the department and against the assessee. The court directed that the answers and opinion be transmitted to the Income-tax Appellate Tribunal.