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TMI Blog1981 (9) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... the first question had agreed to refer the second question for this court's opinion. The assessee in its reference application had asked the Tribunal to refer to this court's opinion six questions. The Tribunal while refusing to refer the last two questions, they being questions of fact, and the fourth question not being argued by the assessee, agreed to refer the first three questions to the court for its opinion. However, ultimately, the Tribunal appears to have rolled the said four questions, one by the Revenue and three by the assessee, into one question stated above and has referred the same to this court. We, however, feel that if the Tribunal had retained the said four questions as they were framed by the parties and accepted by the Tribunal for being referred to this court instead of rolling them into one, the controversy between the parties could have been brought out more clearly and plainly than done by the said single question. We, therefore, have reframed the said one question referred to us into four questions as they originally stood. The said questions are: " (1) Whether, on the facts and circumstances of the case, penalty for failure to furnish the return of in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xonerate the assessee from default in filing a return and from consequent levy of penalty for such default. The ITO, therefore, imposed a penalty of Rs. 6,295 at the rate of 2% per month of the tax determined, by treating the assessee as an unregistered firm. Against the said order of the ITO imposing penalty, the assessee appealed to the AAC. Before the AAC the main contention of the assessee was that since in pursuance of the notice dated 12th October, 1963, issued by the ITO under s. 139(2) or s. 148 it had filed the return within the period of one month prescribed under the notice, the ITO could not adopt penalty proceedings under s. 271(1)(a) of the I.T. Act, 1961, for default under s. 139(1) of the said Act and such proceedings being invalid, the order of the ITO could not be sustained. The AAC accepted the said contention of the assessee by observing that as there was no provision for presuming that the return submitted in response to a notice under s. 139(2) or s. 148 can be presumed to have been submitted under s. 139(1), default under s. 139(1) never ceased but still continued and so no penalty could be levied for a default under that section. He accordingly cancelled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t reasonable cause failed to furnish the return of total income which he was required to furnish under sub-section (1) of section 139 or by notice given under subsection (2) of section 139 or section 148 or has without reasonable cause failed to furnish it within the time allowed and in the manner required by sub-section (1) of section I 39 or by such notice, as the case may be, or ...... he may direct that such person shall pay by way of penalty, (i) in the cases referred to in clause (a),-... (b) in any other case, in addition to the amount of the tax, if any, payable by him, a sum equal to two per cent. of the assessed tax for every month during which the default continued;... " In this case it is not disputed that the assessee has failed to file return of income voluntarily as required under s. 139(1) of the I.T. Act, 1961, but had filed the same in pursuance of a notice issued under s. 139(2) or s. 148 of the said Act within the time prescribed therein. It, therefore, cannot be disputed that the assessee has committed a default in not filing its return of income under s. 139(1). The question is whether there was anything in the said provisions to hold that in view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 139(2) and an assessment is made on the basis of that return. " Similar view has been taken by the Orissa High Court in the case of CIT v. Gangaram Chapolia [1976] 103 ITR 613 [FB]. The court there negatived the contention that as the assessee had filed a return within the time allowed under s. 139(4) of the I.T. Act, 1961, he should be deemed to have filed the return within the time allowed under s. 139(1) and consequently no penalty under s. 271(1)(a) was imposable. The third decision was of the Allahabad High Court in the case of Metal India Products v. CIT [1978] 113 ITR 830 [FB]. In that case, the assessee had failed to file a return under s. 139(1) of the I.T. Act, 1961. Also no notice was served under s. 139(2) on him. But the assessee had filed the return under s. 139(4)(a) providing for filing of return for any previous year before the assessment is made or any time before the end of the period specified in s. 139(4)(b). The court, dealing with such a case held (headnote): " Where the assessee did not file his return within the time prescribed by section 139(1) of the Income-tax Act, 1961, and where no notice was issued by the Income-tax Officer to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct from the commencement of the Act of 1961, by replacing the word " tax ", as appearing in the said section, by the words " assessed tax ". The Explanation to the said amendment Act (s. 13) provides: " In the said clause, ' assessed tax ' means tax reduced by the sum, if any, deducted at source under Chapter XVII-B or paid in advance under Chapter XVII-C." The said Explanation, therefore, provided for a deduction from the tax of only the tax deducted at source or the tax paid in advance and not the provisional tax, as directed by the Tribunal in its order. In fact, the Tribunal provided for a deduction of the provisional tax by Correcting its original order which provided for the self-assessment tax instead. However, in view of the said Explanation, the Tribunal's order for deduction of the provisional tax cannot stand. In the circumstances, the questions would be answered as under: Questions Nos. 1, 2 and 3 In the affirmative and against the assessee. Question No. 4 : So far as the order of the Tribunal provides for the deduction of advance tax from the gross tax, it was justified in passing the order. However, so far as it provides for the deduction of provisional ..... X X X X Extracts X X X X X X X X Extracts X X X X
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