Satish Chandra, C.J. - (1.) THE assessee is a firm. It carries on business of manufacture and sale of building fittings at Hathras. For the assessment year 1963-64, the return was due to be filed on or before Sept. 30, 1963 under Section 139 (1) of the Income-tax Act, 1961. For the assessment year 1965-66, the return under Section 139 (1) was due to be filed on or before Sept. 30, 1965. No notice under Section 139 (2) was served on the assessee for either of the two years. THE assessee filed its return under Section 139 (4) of the Act on Oct. 12, 1966 for both the assessment years. It declared an income of Rs. 9,920/-for the assessment year 1963-64 and an income of Rs. 37,140/- for the assessment year 1965-66.
(2.) THE Income Tax Officer, by an assessment order dated December 25, 1967, assessed the total income for 1963-64 at Rs. 14,776/-, while for the year 1965-68 he computed the assessable income at Rs. 45,205/-. Finding that there was delay in filing the return, the Income Tax Officer initiated penalty proceedings under Section 271 (1) (a) of the Act. He imposed a penalty of Rs. 960/- for the assessment year 1963-64 and of Rs. 3,312/- for the year 1965-66 on the finding that there was a delay of 37 months in filing the return for the earlier and of 12 months in filing the return for the subsequent year. The assessee went up in appeal but failed. The tribunal also confirmed the view that the assessee having committed default in filing the returns beyond time prescribed by Section 139 (1), penalty was leviable. On the question of quantum, the Tribunal returned the case to the Appellate Assistant Commissioner for reconsideration. At the instance of the assessee, the tribunal has solicited our opinion on the following questions of law: "1. Whether, upon the facts and in the circumstances of the case, the return of income filed under Section 139 (4) is to be treated as a return filed within time? 2. Whether, upon the facts and in the circumstances of the case, the assessee was legally liable to penalty under Section 271 (1) (a)?"
(3.) THE reference came up for hearing before a Division Bench of this Court. It was urged before it that a return filed under Section 139 (4) is a distinct kind of return for which no penalty has been provided under Section 271 (1) (a) and, as such, no penalty can be imposed. In support, reliance was placed upon a Division Bench decision of this Court in Income Tax Officer v. Adarsh Construction Co, ((1968) 70 ITR 796 (All)). THE Bench thought that this case required reconsideration and it, therefore, referred the case to a Full Bench. That is how the case has come up before us. Chap. XIV of the Act is entitled "Procedure for assessment." It begins with Section 139. Sub-section (1) of Section 139 requires every person who has assessable income to furnish a return of his income. It also lays down a period of limitation for it. The proviso to Sub-section (1) authorises the Income Tax Officer to extend the date for furnishing the return up to a certain point of time without charging any interest, and beyond that time, upon payment of interest.;