JUDGMENT :

P.N. Bhagwati, J.

This reference raises a very interesting question of law relating to the interpretation of section 271(1)(a) of the Income-tax Act, 1961 (hereinafter referred to as "the new Act"). The facts giving rise to the reference are few and may be briefly stated as follows. The assessee is a registered firm and for the assessment year 1961-62, the assessee was required to furnish its return of income on or before 30th June, 1961, by virtue of the public notice issued by the Income-tax Officer under section 22, sub-section (1) of the Indian Income-tax Act, 1922 (hereinafter referred to as "the old Act"). The date for delivery of the return, namely, 30th June, 1961, was not extended by the Income-tax Officer under the proviso to section 22, sub-section (1), and the assessee should have, therefore, filed its return of the income on or before that date. But the assessee failed to do so and filed its return of income as late as 31st January, 1966. By that time the old Act was repealed and the new Act had taken its place and section 297(2)(b) of the new Act required that since the return of income was filed by the assessee after the commencement of the new Act, the assessment of the assessee for the assessment year 1961-62 should be made in accordance with the procedure specified in the new Act. The return of income being filed before the expiration of four years from the end of the assessment year 1961-62, it was regarded as a voluntary return under section 139, sub-section (4), and the Income-tax Officer processed it and assessed the assessee to tax under section 143. The Income-tax Officer in the course of the assessment proceedings was prima facie satisfied that the assessee had without reasonable cause failed to furnish its return of income within the time allowed by the notice under section 22, sub-section (1) of the old Act and he, therefore, issued a notice under section 274 calling upon the assessee to show cause why penalty should not be levied upon it under section 271(1)(a). The assessee submitted its explanation giving various reasons for late filing of the return, but the Income-tax Officer was not satisfied with the explanation offered by the assessee and he levied a penalty of Rs. 16,415 on the assessee under section 271(1)(a). The assessee appealed against the order of penalty to the Appellate Assistant Commissioner but the appeal was unsuccessful. The matter was thereupon carried in further appeal to the Tribunal. There was only one contention urged before the Tribunal, namely, that the return having been filed before the assessment was made and within four years from the end of the assessment year 1961-62 as provided under section 139, sub-section (4), there was no default on the part of the assessee for which penalty could be levied under section 271(1)(a). This contention was accepted by the Tribunal in view of the decision of the Supreme Court in Commissioner of Income-tax v. Kulu Valley Transport Co. P. Ltd. [1970] 77 I.T.R. 518 and the Tribunal held, relying on certain observations in this decision, that the return having been filed before assessment within four years from the end of the assessment year 1961-62 as contemplated under section 139, sub-section (4), it must be deemed to have been filed within the time allowed under section 22, sub-section (1), of the old Act and there was accordingly no default on the part of the assessee within the meaning of section 271(1)(a). The Tribunal in this view of the matter allowed the appeal and set aside the order of penalty. The question is whether this view taken by the Tribunal is correct.

2. It may be pointed out at the outset that though, on the facts of the present case, the default for which penalty was sought to be levied by the revenue was one in respect of section 22, sub-section (1), of the old Act, it was common ground between the parties that the position would be the same as if the default related to non-compliance with section 139, sub