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TMI Blog1973 (8) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee was carrying on business as an individual in the relevant years and was the recipient of income from some foreign concerns. He did not file returns under section 22(1) for the respective assessment years. His explanation for not returning the income from the foreign concerns for the respective relevant assessment years was ultimately rejected by the revenue authorities. The Income-tax Officer having come to know that the assessee had not disclosed the commission from the foreign firms, initiated proceedings for reopening the assessments under section 147 of the Income-tax Act, 1961. After the issue of the notice under section 148, the assessee complied with the terms of that notice, filed the returns and disclosed the commission rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee was accepted by the Appellate Assistant Commissioner and the orders of penalty were set aside. The revenue carried the matter in appeal before the Income-tax Appellate Tribunal and the Tribunal held that the original default under section 22(1) could be the subject-matter under section 148 of the 1961 Act. The Tribunal held that the addition of the words "as the case may be" in section 271(1)(a) did not materially alter the position as it existed under the 1922 Act. Thus, the Tribunal held that in reassessment proceedings the original default committed by the assessee in not filing the return could be penalised. It is after this decision of the Tribunal that the question hereinabove set out has been referred to us at the instance o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the case may be" go with the last two alternatives mentioned in section 271(1)(a), namely, "has without reasonable cause failed to furnish it (the return) within the time allowed and in the manner required by sub-section (1) of section 139 "or" has without reasonable cause failed to furnish the return within the time allowed and in the manner required by such notice", that is, notice under section 139(2) or under section 148 and the words "as the case may be" refer only to either of these two alternatives and they cannot be interpreted as referring to default No. 1 or default No. 2 mentioned by us in this judgment as occurring in the earlier part of clause (a) of section 271(1). Therefore, the addition of the words "as the case may be" d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Rajasthan High Court observed : "The addition of the words 'as the case may be' at the end of section 271(1)(a) of the Act presents us with no problem in interpretation..." and it was further observed : "The words 'as the case may be' have been put because all these four cases have been condensed in one paragraph and these words only mean that, whichever the case may be, the person shall be deemed to have committed default for which penalty was to be imposed under section 271(1)(i) of the new Act. These words 'as the case may be' have their full meaning when we construe section 271(1)(a) in this light". To this extent there is a slight difference between the interpretation placed by us on the words "as the case may be" and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalised if he had filed a return after a notice had been given under sub-section (2) of section 139. It was pointed out that before taking any assessment proceedings, it was incumbent on the Income-tax Officer to issue notice under sub-section (2) of section 139. Such a view would mean that any person liable to pay income-tax may sit comfortably without any fear of the imposition of penalty and not furnish his return as required under section 139(1) and wait till a notice is given to him under section 139(2) and then file a return within the time mentioned in that notice. In our view this reasoning, at page 706 of the report of the Rajasthan High Court decision, should be accepted because otherwise there was no sense in providing penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be, and in view of this position, it is obvious that even though the proceedings may be reopened under section 148, so long as it is found in the course of those reassessment proceedings that there was original default committed under section 22(1) of the old Act, for which penalty could have been levied under section 28(1) of the old Act, it is open to the Income-tax Officer in reassessment proceedings to impose penalty under section 271(1)(a) of the new Act. In Commissioner of Income-tax v. Ochhavlal Pannalal Kothari, this High Court has taken the view that the penalty under the clauses as mentioned in section 271(1)(a) could be levied by the Income-tax Officer for non-compliance with the notice under section 22(1) and that the quantu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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