SATISH CHANDRA, C.J. :- The assessee is a firm. It carries on business of manufacture and sale of building fittings at Hathras. For the assessment year 1963-64, the return was due to be filed on or before Sept. 30, 1963 under S. 139 (1) of the Income-tax Act, 1961. For the assessment year 1965-66, the return under S. 139 (1) was due to be filed on or before Sept. 30, 1965. No notice under S. 139 (2) was served on the assessee for either of the two years. The assessee filed its return under S. 139 (4) of the Act on Oct. 12, 1966 for both the assessment years. It declared an income of Rs. 9,920/-for the assessment year 1963-64 and an income of Rs. 37,140/- for the assessment year 1965-66.

2. The Income Tax Officer, by an assessment order dated December 25, 1967, assessed the total income for 1963-64 at Rs. 14,776/-, while for the year 1965-66 he computed the assessable income at Rs. 45,205/-

3. Finding that there was delay in filing the return, the Income Tax Officer initiated penalty proceedings under S. 271 (1) (a) of the Act. He imposed a penalty of Rs. 960/- for the assessment year 1963-64 and of Rs. 3,312/- for the year 1965-66 on the finding that there was a delay of 37