Commissioner of Income Tax vs Baldeo Choudhary Vijay Kumar

A statement of the case has been submitted by the Income Tax Appellate Tribunal, "B" Bench, Patna, u/s 256(1) of the Income Tax Act and the following question has been referred to this court for opinion :

"Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that once the notice u/s 139(2) had been served, no penalty could be imposed for the default of one month u/s 139(1) of the Income Tax Act, 1961 ?"

The Tribunal has taken a view in favour of the assessee and against the Revenue. It is needless to go into the facts as a pure question of law is actually involved and is squarely covered by a Full Bench decision of this court in Jamunadas Mannalal Vs. Commissioner of Income Tax, . More or less, the same question was involved in the case of Jamunadas Mannalal Vs. Commissioner of Income Tax, . By a majority, this court held this question against the assessee and in favour of the Revenue. It was held by the Full Bench as follows (p. 289):

" To conclude, I hold that on the facts and in the circumstances of the case, penalty u/s 271(1) is leviable upon the assessee...... on the basis of tax as an unregistered firm has been validly levied on the assessee for the assessment year 1966-67. It is thus obvious that all the questions referred to this court have to be answered against the assessee. The question as to whether penalty u/s 271(1)(a) could be imposed even after charging interest u/s 139 for delayed submission of return in all its aspects including the broad question as refrained, whether, in the facts and in the circumstances of the case, penalty u/s 271(1) is leviable or not is answered in the affirmative."

We are, therefore, constrained to hold that the view taken by the Tribunal was not correct. The question referred to this court as mentioned at the outset must, therefore, be answered in favour of the Revenue and against the assessee. We, accordingly, hold that the Appellate Tribunal was not justified in holding that once the notice u/s 139(2) of the Income Tax Act, 1961, had been served, no penalty could be imposed for the default u/s 139(1) of the Income Tax Act, 1961.

The question thus referred to this court is answered in the affirmative, in favour of the Revenue and against the assessee. Parties shall bear their own costs.

Let a copy of this judgment be sent under the seal of this court and the signature of the Registrar to the Income Tax Appellate Tribunal, "B" Bench, Patna.