SABYASACHI MUKHARJI, J.

( 1 ) THIS reference arises out of the proceedings for the levy of penalty under Section 271 (1) (a) of the I. T. Act, 1961. The ITO issued a notice under Section 159 (2) of the Act on 28th August, 1963, for the assessment year 1963-64. The return was due on 1st October, 1963. The previous year was 1369 B. S. ending on 14th April, 1963. The assessee filed a return on 4th January, 1965, after a delay of a little over 15 months. It was a firm of three partners and was duly assessed as a registered firm. The ITO initiated penalty proceedings under Section 271 (1) (a) read with Section 274 of the Act and issued a show-cause notice. The assessee filed a reply raising various objections. It is unnecessary for our present purpose to go into those objections as there are no materials on the point on which the reference has been made.

( 2 ) THE ITO held that the assessee was liable to penalty, under Section 271 (1) (a) of the Act, of Rs. 15,335, being 2% of the tax for every month during which the default had continued. He calculated this penalty on the basis of the tax due from an unregistered firm, as envisaged by Section 271 (2) of the Act.

( 3 ) THE assessee b

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