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Section 271(1)(a), read with sections 139(1) and 139(4) of Income-tax Act, 1961 – Penalty – For late filing of return - Assessment year 1963-64 – Whether filing of return under section 139(4) did not absolve assessee of his default in complying with terms of section 139(1) and consequently penalty under section 271(1)(a) was leviable on him – Held, yes FACTS For the relevant assessment year the assessee did not file his return under section 139(1). He, however, filed the return under section 139(4). Although the ITO had not initiated any penalty proceedings under section 271(1)(a), the AAC after rejecting assessee's explanation imposed a penalty for the default. On appeal, the Tribunal deleted the entire penalty on the ground that by filing return under section 139(4), the default in compliance with the terms of section 139(1) got wiped off. On reference : HELD Following the decision in Addl. CIT v. Dongarsidas Biharilal [1979] 116 ITR 897, it was held that the filing of return of income under section 139(4) did not absolve the assessee of his default in complying with the terms of section 139(1), and consequently, penalty under section 271(1)(a ) was leviable on him. Note : The decision was in favour of revenue. CASE REFERRED TO CIT v. Dangarsidas Bihari Lal [1979] 116 ITR 897 (Pat.) JUDGMENT S.P. Sinha, J.—The Patna Bench of the Tribunal has referred the undermentioned question under s. 256(1) of the I.T. Act, 1961 (hereinafter referred to as "the Act"): "Whether, on the facts and in the circumstances of the case, penalty could be imposed when the return is filed under s. 139(4) of the I.T. Act, 1961?" The relevant facts are that for the previous year ended on 27th October, 1962, relevant to the assessment year 1963-64, the assessee did not file his return of total income under s. 139(1) of the Act which he should have done by the 30th of June, 1963. No notice under s. 139(2) was issued to him. The assessee, however, filed return of income under s. 139(4) of the Act on 12th August, 1966. Although the ITO had not initiated any penalty proceedings under s. 271(1)(a), the A AC did so and after rejecting the assessee's explanation for the default, imposed a…

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