Law:

Section:

Section 271(1)(a), read with section 139(1)(iii) [as it stood prior to 1-4-1971], of the Income-tax Act, 1961 - Penalty - For late filing of return - Whether penalty under section 271(1)(a) can be imposed even after levying interest for delayed filing of Return under section 139(1)(iii) - Held, yes - Whether penalty calculated on basis of tax on unregistered firm has to be levied when no tax is payable by assessee as registered firm - Held, yes FACTS For the assessment year 1967-68, the return of income was due on 30-6-1967 but the same was filed by the assessee on 3-9-1968. The ITO initiated penalty proceedings under section 271(1)(a) for delayed filing of the return without reasonable cause. The assessee claimed (i) that since interest had been charged for late filing of return, it might be presumed that the time was extended for filing of return and consequently no penalty proceedings would lie ; (ii) that when interest had been charged for late filing of the return no penalty should be imposed; and (iii) that for calculating the penalty the tax on a registered firm should be taken and not the tax on an unregistered firm, and as no tax was due from the assessee during the assessment year in question as substantial amount was due to him as refund for the earlier years the proceeding under section 271(1)(a) was not maintainable. The ITO, however, held that no application was made for extension of time for filing return and the assessee also had not been able to show sufficient cause which prevented filing of return within due time. He, therefore, levied penalty under section 271(1)(a). On appeal, the Tribunal also rejected the assessee's contentions. On reference: HELD If a return is filed under section 139(4), then by virtue of section 139(4), as it was in existence in 1967-68, interest had to be charged in view of sub-clause (iii) of the proviso to section 139(1) and the question of any presumption in such a case did not arise specially when there was a clear finding in the instant case that the assessee never filed, any application for extension of time and so the question of presumption that as the interest had been charged the extension should be deemed…

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