BHANDARI, C.J. —This is a reference by the Income-Tax Appellate Tribunal, Delhi Bench A, hereinafter called the Tribunal, under sec. 256(1) of the Indian Income-Tax Act, 1961, hereinafter called the Act, made at the instance of the Commissioner of the Income-Tax.

2. Messrs. Indra and Company, Jodhpur a registered firm under the Act and one of its partner Shri Jiwanlal Maheshwari had to submit their income-tax returns under sec. 139(1) of the Act by or before 30th June, 1962.Both of them made applications to the Income-Tax Officer, A Ward, Jodhpur, for extending the time for filing their returns and the time was extended upto 31-8-62 in both the cases. Again applications were made for extension of the time and they were granted time upto 20-9-62 and further extension was granted upto 30-9-62, but the returns were not filed even on that day. The said Income-tax Officer then served notices on the assessees under sec. 130(4) of the Act calling upon them to file returns within thirty days and the returns were then filed on 25-4-63. During the course of assessment proceedings, the Income-Tax Officer issued notices against the assesses to show cause why penalty should not be imposed for failure to submit the returns under sec. 139(1) of the Act. The assessees submitted applications showing cause for delay but the Income-Tax Officer did not hold their explanation to be reasonable and imposed penalties on both of them under sec. 271(1) (a) of the Act. Both the assessees preferred appeals before the appellate Assistant Commissioner raising two contentions. The first contention was that as soon as notices under sec. 139 2) of the Act were issued, it must be taken that the, delay in filing the returns under sec. 139(1) was condoned by the Income-Tax, Officer and as such no action could be taken for not filing the returns in time as laid down under sec. 139(1). The other contention was that the Income-tax Officer had not mentioned in the assessment order that the penalty proceedings were being initiated for default under sec. 139(1) and as such penalty proceedings could not be said to be initiated during the course of the assessment proceedings. The Appellate Assistant Commissioner "rejected both the arguments and confirmed the orders of the Income-tax Officer. The assessees then preferred appeals before the Tribunal and the Tribunal took the view that as in each case the assessment proceedings had been initiated and completed on the basis of the returns submitted under sec. 139(2) it was not permissible under law that penalty should be imposed for any default committed in not submitting the returns under sec. 139(1). On application by the Commissioner of Income-tax the Tribunal has submitted the following question for the opinion of this Court—

"Whether the Tribunal rightly held that the orders of penalties in question under sec. 271(1) (a) of the Income-tax Act, 1961, were not tenable in raw?"

In order to appreciate the argument of the Tribunal for taking the view that penalty could not be imposed on the assessees for any default committed in furnish-ing the returns as required under sec. 139(1), it is necessary to set-out the following relevant portions of sec. 271 (1) of the Act and sec. 28 of the Indian Income-Tax Act, 1922—

"Sec. 271(1)—If the Income-tax Officer or the Appellate Assistant Commissioner in the course of any proceedings under this Act, is satisfied that any person—

(a) has without reasonable cause failed to furnish the return of total income which he was required to furnish under sub-sec. (1) of sec. 139 or by notice given under sub-sec. (2) of sec. 139 or sec 148 or has without reasonable cause failed to furnish it within the time allowed in the manner required by sub-sec. (1) of sec. 1 39 or by such notice, as the case may be, or

(b)x x x x x x x

(c)x x..... x x x x

he may direct that such preson shall, pay by way of penalty—

(i) in the cases referred to in clause (a), in addition to the amount of the tax, if any, payable

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