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 months in filing the return for the earlier and of 12 months in filing the return for the subsequent year.

4. The assessee went up in appeal but failed. The tribunal also confirmed the view that the assessee having committed default in filing the returns beyond time prescribed by S. 139 (1), penalty was leviable. On the question of quantum, the Tribunal returned the case to the Appellate Assistant Commissioner for reconsideration. At the instance of the assessee, the tribunal has solicited our opinion on the following questions of law :

" 1. Whether, upon the facts and in the circumstances of the case, the return of income filed under S. 139 (4) is to be treated as a return filed within time?

2. Whether, upon the facts and in the circumstances of the case the assessee was legally liable to penalty under S. 271 (1) (a)?"

5. The reference came up for hearing before a Division Bench of this Court. It was urged before it that a return filed under S. 139 (4) is a distinct kind of return for which no penalty has been provided under S. 271 (1) (a) and as such, no penalty can be imposed. In support, reliance was placed upon a Division Bench decision of this Court in Income Tax Officer v. Adarsh Construction Co. ((1968) 70 ITR 796 (All)). The Bench thought that this case required reconsideration and it, therefore, referred the case to a Full Bench. That is how the case has come up before us.

6. Chap. XIV of the Act is entitled " Procedure for assessment." It begins with S. 139. Sub-sec. (1) of S. 139 requires every person who has assessable income to furnish a return of his income. It also lays down a period of limitation for it. The proviso to sub-sec. (1) authorises the income Tax Officer to extend the date for furnishing the return up to a certain point of time without charging any interest, and beyond that time, upon payment of interest.

7. Sub-sec. (2) of S. 139 authorises the Income Tax Officer to issue a notice requiring a person to file the return of his income within 30 days of the service of the notice. The proviso thereto entitles the Income Tax Officer to extend the time on the same lines as in the proviso to sub-sec. (1). Sub-sec, (4) of S. 139 provides :

" (4) Any person who has not furnished a return within the time allowed to him under sub-sec. (1) or sub-sec. (2) may, before the assessment is made, furnish the return for any previous year at any time before the end of four assessment years from the end of the assessment year to which the return relates, and the provisions of sub-cl. (iii) of the proviso to sub-sec. (1) shall apply in every such case."

8. Section 139 lays down three periods of limitation for filing a return. A return may be filed within the time allowed under sub-s. (1) or if a notice has been issued by the Income tax Officer under