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Section 9(a) of companies (Profits) Surtax Act, 1964 - Penalty - For failure to file return - Assessment year 1968-69 - Whether section 9 envisages levy of penalty only for failure in filing return under section 5, and, therefore, penalty can not be imposed on ground of failure to file return within time prescribed under sub-section (1) or sub section (2) of section 5 when return is filed before assessment is made - Held, yes FACTS The assessee should have filed its return for the relevant year under section 5(1) on or before 30-9-1968. The return was, however, filed on 16-9-1972, but before the assessment was made. the ITO unitiated penalty proceeding for the delay in the filing of the return and issued a show-cause notice under section 10. The assessee filed an objection in which mainly it was contended that there had been no failure on its part to furnish a return, and that the delay was not deliberate and wilful and hence section 9 was not applicable. The ITO did not accept the assessee's explanation as satisfactory and imposed penalty under section 9(a). The AAC held that the penalty could not be levied under section 9(a) because even though the return was filed after a delay, since it was filed before the making of the assessment, no default was committed On revenue's appeal, the Tribunal affirmed the order of AAC. On reference : HELD In section 9 levy of penalty has been provided for failure to furnish a return without reasonable cause, required under section 5. It does not say that the failure should be to furnish the return within the time and in the manner prescribed under sub-section (1) or within the time allowed in the notice issued under sub-section (2). It envisages a levy of penalty only for the failure to furnish a return required under section 5. In other words, if no return has been filed as required under sub-section (1) or within the time given by the notice issued under sub-section (2) but is filed under sub-section (3) before the assessment is made, there will be no default. Thus, if an assessee filed a return under sub-section (3) of section 5, it would also be a return 'required' by this provision. Simply because the world 'required' is…

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