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HIGH COURT OF CALCUTTA
SANKAR PRASAD MITRA, SALIL KUMAR ROY CHOWDHURY
NARAIN DAS PARAMANAND DAS - Appellant
Versus
INCOME-TAX OFFICER, e WARD - Respondent
Appeal From Original Order 59 Of 1972
Decided On : JULY 17, 1974
INCOME TAX - Return of income - Failure to furnish return within time - Penalty - Whether assessee can be said to be guilty of default so as to attract penalty under Section 271 (1) (a) of the Income Tax Act, 1961, where return is furnished under Section 139 (4) of the Act - Interpretation of Sections 139 (1), 139 (4) and 271 (1) (a) of the Act.
Fact of the Case:
The appellant, a partnership firm, filed its return for the assessment year 1963-64 on 23rd May, 1967, and a revised return on 14th September, 1967. The Income Tax Officer (ITO) imposed interest for the said assessment year amounting to Rs. 87,020 under Section 139 (1) (b), proviso to Clause (iii), and Rs. 510 under Section 215 of the Act. The appellant challenged the imposition of penalty under Section 271 (1) (a) of the Act, arguing that the return was filed before the assessment was complete and therefore, it cannot be said that the return was filed out of time. The appellant also contended that the penal interest was levied under Section 139 of the Act, the respondents cannot initiate proceeding under Section 271 for penalty inasmuch as it would amount to double jeopardy.
Finding of the Court:
The court held that the appellant was liable to pay penalty under Section 271 (1) (a) of the Act, as it had failed to furnish the return of income within the time allowed under Section 139 (1) or Section 139 (2) of the Act. The court further held that the filing of return under Section 139 (4) of the Act cannot come within the meaning of the words "within the time allowed. . . . . . by Sub-section (1) of Section 139" within the meaning of Clause (ii) of Section 271 (1) (a) of the Act.
Issues: 1. Whether the appellant was liable to pay penalty under Section 271 (1) (a) of the Act, as it had failed to furnish the return of income within the time allowed under Section 139 (1) or Section 139 (2) of the Act? 2. Whether the filing of return under Section 139 (4) of the Act can come within the meaning of the words "within the time allowed. . . . . . by Sub-section (1) of Section 139" within the meaning of Clause (ii) of Section 271 (1) (a) of the Act?
Ratio Decidendi: 1. The court held that the appellant was liable to pay penalty under Section 271 (1) (a) of the Act, as it had failed to furnish the return of income within the time allowed under Section 139 (1) or Section 139 (2) of the Act. The court observed that the appellant had not filed its return within the time allowed under Section 139 (1) or Section 139 (2) of the Act, and therefore, it was liable to pay penalty under Section 271 (1) (a) of the Act. 2. The court held that the filing of return under Section 139 (4) of the Act cannot come within the meaning of the words "within the time allowed. . . . . . by Sub-section (1) of Section 139" within the meaning of Clause (ii) of Section 271 (1) (a) of the Act. The court observed that Section 139 (4) of the Act gives a statutory right to an assessee to furnish the return for any previous year at any time within 4 years from the end of the assessment year and in such a case the provisions of Clause (iii) of the proviso to Section 139 (1) shall be applied in every case. Therefore, the court held that the appellant was not entitled to any relief under Section 139 (4) of the Act.
Final Decision: The appeal was dismissed.
( 1 ) THIS is an appeal from a judgment and order dated the 7th of February, 1972 [narandas Paramanand Das v. Income-tax Officer ] by which the trial judge dismissed the petitioner's writ petition directed against three notices, two dated the 3rd of December, 1966, and 6th of March, 1968, issued by the respondent No. 1 under Section 274 read with Section 271 of the I. T. Act, 1961, and the third one being dated the 21st of February, 1968, issued under Section 274 read with Section 273 of the said Act. All the said notices were in respect of the assessment year 1963-64 for imposing penalty, calling upon the appellant, which is a partnership-firm, to show cause why penalty should not be imposed for not filing the return under Section 139 (1) of the I. T. Act, 1961, and also for not filing an estimate of advance tax payable under Section 18a (3) of the Indian I. T. Act, 1922, or Section 212 (3) of the I. T. Act, 1961, for the same assessment year.
( 2 ) THE appellant argued only two points before the trial court. Firstly, that Section 22 (3) of the Indian I. T. Act, 1922, is nothing but a proviso to Section 22 (1)/22 (2) of the said Act and as such if the return is filed before the assessment is complete then it cannot be said that the return is filed out of time. The said contention was advanced on the basis of the Supreme Court decision in CIT v. Kulu Valley Transport Co. P. Ltd. and S. C. Praskar v. Vasantsen Dwarkadas. The second point urged was that the penal interest was levied under Section 139 of the I. T. Act, 1961, the respondents cannot initiate proceeding under Section 271 for penalty inasmuch as it would amount to double jeopardy.
( 3 ) IT is an admitted position in this case that the appellant filed the return for the assessment year 1963-64 on the 23rd of May, 1967, and thereafter a revised return was filed on the 14th of September, 1967. It is also admitted that the ITO has imposed interest for the said assessment year amounting to Rs. 87,020 under Section 139 (1) (b), proviso to Clause (iii), and Rs. 510 under Section 215 of the said Act. The trial judge rejected both the contentions of the appellant relying on the Supreme Court decision in Gursahai Saigal v. CIT [1963] 48 ITR (SC) 1.
( 4 ) BUT before us Dr. Debi Pal appearing with Mr. Sanjoy Bhattacharjee for the appellant argued a completely new case which was not argued before the trial court at all. As the said question was purely a question of law as to the construction and interpretation of Sections 139 (1) and 139 (4) of the I. T. Act, 1961, we allowed the said point to be raised and both parties argued only on the said question and cited several Supreme Court decisions and decisions of other High Courts in India dealing with that aspect of the matter.
( 5 ) IT is now purely a question of construction of Section 139 (1), prov. (iii), and Section 139 (4) of the 1961 Act and also Section 271 (1) (a) of the said Act. For convenience I am setting out the said provisions hereunder ]"139. Return of income.-- (1) Every person, if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax, shall furnish a return of his income or the income of such other person during the previous year in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed- -. . . (b) in the case of every other person, before the 30th day of June of the assessment year: provided that, on an application made in the prescribed manner, the Income-tax Officer may, in his discretion, extend the date for furnishing the return- -. . . . . . (iii) up to any period falling beyond the dates mentioned in Clauses (i) and (ii), in which case, interest at nine per cent. per annum shall be payable from the 1st day of October or the 1st day of January, as the case may be, of th
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