Bombay H.C : Whether, on the facts and in the circumstances of the case, the assessee had failed to furnish the return of his total income within the time allowed, by sub-s. (1) of s. 139 of the IT Act, 1961 ?

Counsel Appeared

H.K. Sajnani with R.J. Joshi & L.K. Chatterjee, for the Revenue : S.J. Mehta with I.M. Munim, for the Petitioner

DESAI, J. :

The question referred to us, at the instance of the CIT, by the Tribunal, Bombay Bench C, is as follows :”Whether, on the facts and in the circumstances of the case, the assessee had failed to furnish the return of his total income within the time allowed, by sub-s. (1) of s. 139 of the IT Act, 1961 ?”

2. In this case the return was due according to the ITO by 30th August, 1962, but was filed on 27th November, 1964. No explanation was given by the asses see on what account the delay has occurred. However, the plea of the assessee was that he had voluntarily filed the return under s. 139(4) and hence he had not committed any default under s. 271(1)(a). The ITO declined to accept this plea and levied penalty of Rs. 11,326 at 50 per cent. of the amount of tax.

3. Before the AAC an additional contention was raised by the assessee, namely, that he had been charged interest in terms of prov. (iii) to s. 139(1) but no penalty is leviable. This contention was rejected by the AAC who sustained the penalty imposed by the ITO.

4. Before the Tribunal, the assessee relied on (Kulu Valley Transport Co.’s (1970) 77 ITR 518 (SC) . The Tribunal accepted the submission and cancelled the penalty. The Tribunal, however, rejected the other plea, namely, that because interest was charged, an automatic extension of time followed. This was specifically negatived and, according to the Tribunal, the date for furnishing the return could only be extended on an application to be made by the assessee in the prescribed manner. There was no such evidence on record of such application having been made.

5. On behalf of the Department our attention has been drawn to a number of judgments in which the point has been considered by the High Courts. The latest of these judgments is Addl. CIT vs. Bhagat Swarup Charanjit Singh & co. (1981) 23 CTR (Del) 69: (1982) 133 ITR 13 (Delhi). In the said judgment the Delhi. High Court has considered all the cases including the decision of the Supreme Court in CIT vs. Kulu Valley Transport Co. P. Ltd. (supra). In the opinion of the Delhi High Court, the principle laid down in the said case cannot be extended to the context of s. 27l(1)(a) of the IT Act, 1961. The said decision also referred to the earlier decision of the Madhya Pradesh High Court in Chunnilal & Bros. vs. CIT (1979) 119 ITR 199 (MP).

6. Following these decisions, we are of the opinion that the assessee had failed to furnish the return of his total income within the time allowed by sub-s. (1) of s. 139 of the IT Act, 1961.

7. Mr. Mehta submits that this is a fit matter in which the CIT can reduce or waive the amount of penalty in his power under s. 273A and the assessee proposes ; to move the CIT for this relief. Our decision is without prejudice to the, right of the assessee to move the CIT and any such application will be required to be dealt with by the CIT on its merits. Parties, however, to bear their own costs of the reference.

[Citation : 141 ITR 413]