Commissioner of Income Tax vs Dhanpatram Chhotelal

A statement of the case has been submitted by the Commissioner of Income Tax, Bihar-II, Ranchi Bench, u/s 256(1) of the Income Tax Act, 1961, and the following question has been referred for the opinion of this court;

"Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that once a ''notice u/s 139(2) of the Income Tax Act, 1961, has been issued to an assessee during the relevant assessment year, there cannot be any penalty u/s 271(1)(a) for the failure to furnish the return u/s 139(1) of the Income Tax Act, 1961 ?"

Learned counsel appearing for the parties are agreed that in similar circumstances and more or less on identical facts, this court had taken a view in favour of the Revenue in Taxation Case No. 49 of 1980 ( Commissioner of Income Tax Vs. Baldeo Choudhary Vijay Kumar, ). That judgment, in its turn, was based upon a judgment of a Full Bench of this court in Jamunadas Mannalal Vs. Commissioner of Income Tax, wherein the Full Bench had held 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 reframed, 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."

In our view, it is futile to go into a detailed discussion of facts. Suffice it to say that the assessment year in question was 1973-74 and the amount of penalty is Rs. 3,520. We, accordingly, hold that on the facts and in the circumstances of the case, the Appellate Tribunal was not correct in holding that there could not be any penalty u/s 271(1) for failure to furnish the return u/s 139(1) of the Act. The question posed before us is, therefore, answered in favour of the Revenue and against the assessee. In the circumstances of the case, however, we shall make no order as to costs.

Let a copy of this judgment be sent under the seal of this court and signature of the Registrar to the Income Tax Appellate Tribunal, Patna, which, we are informed, is the only Bench available throughout the State of Bihar.