Law:

Section:

Section 271(1)(a) of the Income-tax Act, 1961 - Penalty - For late filing of return - Assessment years 1965-66 and 1967-68 - Assessee -company did not file returns under section 139(1) on ground that it had suffered losses during relevant assessment years - ITO, however, completed assessment by establishing annual value of building owned by assessee - He also imposed penalty under section 271(1)(a) - On revision, Commissioner upheld order of ITO - On instant petition, assessee contended for first time that it was not aware of its statutory duty to file returns -Whether, since aforesaid plea was never raised before authorities below, it could not have been raised for first time before this court - Held, yes - Whether, moreover, in view of fact that impugned order passed by ITO imposing penalty was not devoid of any reasoning, it could not be said to be invalid - Held, yes FACTS The assessee-company did not file voluntary returns under section 139(1) for the relevant assessment years on the ground that it suffered losses in both the years. It however, filed returns showing losses in response to notices issued under section 148 and 139 (2). The ITO completed the assessment on total incomes of Rs. 27,029 and Rs. 24,916 by establishing the annual value of the building owned by the assessee. The ITO also imposed penalty under section 271(1)(a). On revision, the Commissioner upheld the order of ITO levying penalty. On instant writ, challenging the levy of penalty, the assessee, contended for the first time that it was not aware of its duty to file the returns. HELD Under section 139(1), it is the duty and obligation of every person whose total income exceeds the maximum amount which is not chargeable to tax, to make a return in the prescribed form, verified in the prescribed manner and also to furnish all the prescribed particulars and failure to make such a return, without reasonable and just cause, entails a liability to penalty under section 271(1)(a). In the instant case, the only ground that was urged in support of the non-filing of the return all throughout was loss and nothing else and not the fact of the knowledge of liability to file return, as had been…

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