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TMI Blog1971 (12) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... 9(2) of the Income-tax Act, 1961, falls within the due date for compliance with the provisions of section 139(1) of the Income-tax Act,, 1961, the notice issued under section 139(2) is illegal ? 2. Whether, on the facts and in the circumstances of the case, non-compliance with the provisions of section 139(2) of the Income-tax Act, 1961, constitutes sufficient cause for exoneration from levy of penalty under section 271(1)(a) of the Act? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the two assessees were liable to penalty under section 271(1)(a) of the Income-tax Act, 1961 ? 4. Whether, on the facts and in the circumstances of the case, the fiction contained under the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, S.Venkatasubbaiah Raju, had no separate income apart from his share of the income from the assessee-firm. Proceedings were taken under section 271(1)(a) of the Act for levy of penalty on the assessee-firm as well as its partner, Venkatasubbaiah Raju. A sum of Rs. 1,895 was levied as penalty on the firm and Rs. 71 was levied as penalty on the partner, Venkatasubbaiah Raju. The contention of the assessee before the Income-tax Officer as also the appellate authorities was that the notices issued under section 139(2) were not legal. The argument was that the Income-tax Officer, in the exercise of his power under section 139(2), has no power to fix a date for submission of return earlier to the expiry of the date prescribed by the statute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o do so; while sub-section (2) confers a power on the income-tax authorities to demand a return at any time before the expiry of the assessment year. We find no incompatibility or repugnance between these two provisions and we see no reason why both of them should not operate simultaneously to their full extent. Reading the two sub-sections harmoniously together, we are of opinion that the intention of the section is that all persons liable to assessment should be under an obligation to furnish a return of income within the time prescribed by sub-section (1) (i.e., either by 30th of June or by 30th of September of the assessment year), provided they have not already been asked by the Income-tax Officer to furnish a return by means of a noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice under sub-section (2). We are in respectful agreement with the view taken in Tarzan Hosiery Private Ltd.'s case by the Allahabad High Court. Accordingly, question No. 1 has to be answered in the negative and against the assessees. On the second question, the explanation offered by the assessee-firm was that the audit of the accounts for the relevant year was not completed till the end of November, 1964, and, therefore, the firm could not file its return earlier. Another reason was that the notice issued under section 139(2) was illegal. Both the reasons have not been accepted by the Tribunal. The question whether or not there was sufficient cause for not filing the return in time is essentially a question of fact and not one of law. We ..... X X X X Extracts X X X X X X X X Extracts X X X X
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