JUDGMENT JUDGMENT P. S. MISHRA J.-At instance of assessee, M/s Jamunadas Mannalal, registered firm, at Jhumritelaiya in district of Hazaribagh, Income-tax Appellate Tribunal, " B " Bench, Patna, has referred to this court following questions of law for opinion: " (1) Whether penalty under section 271 (1)(a) could be imposed even after charging interest under section 139 for delayed submission of return? (2) Whether, on facts and in circumstances of case, Income-tax Officer had forfeited his rights to impose penalty under section 271(1)(a) by not completing assessment under section 143(3)? (3) Whether, on facts of case, penalty of Rs. 8,680 calculated on basis of tax as on unregistered firm could be levied in this case when no tax was payable by it as registered firm? " Assessment years involved are 1965-66 and 1966-67. There being separate penalty orders for two years and separate appeals by assessee before AAC, Ranchi Range, Ranchi, and Income-tax Appellate Tribunal, " B " Bench, Patna, and two references, although by common order, have been made by Tribunal, in this court also references in question have been registered as two taxation cases, one for assessment year 1965-66 and other for assessment year 1966-67. Bench of this court consisting of S. K. Jha and A. K. Sinha JJ. heard matter and on March 31, 1983, noticed that on question as to what should be period for which there can be said to be default for levying penalty in terms of s. 271(1)(a) of I.T. Act, 1961, two Hon'ble judges of this court, namely, S. P. Sinha J. (as he then was) and S. Sarwar Ali J. were in disagreement in case of Addl. CIT v. Dongarsidas Biharilal [1979] 116 ITR 897. They, accordingly, thought it desirable that matter should be heard by Full Bench for authoritative exposition of law. Admitted facts, inter alia are as follows: assessee is registered firm. As provided under s. 139(1)(a) of I.T. Act, 1961 (hereinafter referred to as " Act "), it could file its return of income by June 30, 1965, for assessment year 1965-66, but it failed to do so. Similarly, for assessment year 1966-67, its return of income was due on June 30, 1966. It did not, however, file return within time. assessee was given notice by ITO concerned as provided under sub-s. (2) of s. 139 of Act to furnish return of its income for assessment year 1965-66. assessee did not respond to this notice. assessee submitted return for assessment year 1965-66 on October 17, 1966, and for assessment year 1966-67 on August 28, 1968, under s. 139(4) of Act. Penalty proceedings were initiated for not filing return of income by due date under s. 139(1) of Act and notices were issued under s. 274/271(1)(a) of Act which were duly served on assessee. ITO concluded that assessee failed to submit its return of income for these two years by due date and delayed filing of return without reasonable cause. He, accordingly, imposed penalty of Rs. 8,310 being two per cent. of tax assessed as on unregistered firm for every month of default for assessment year 1965-66 and Rs. 8,680 being two per cent. of assessed tax as on unregistered firm for assessment year 1966-67, after deducting advance tax already paid, for every month daring which default continued. assessee preferred appeals before AAC, Ranchi Range, Ranchi, and its appeals having been dismissed by AAC, it appealed before Appellate Tribunal. Appellate Tribunal also found no merit in appeals as to question that no liability to pay penalty existed but it found force in arguments of assessee's counsel that in determining quantum of penalty, payments of advance taxes should have been considered. It, accordingly, directed ITO to recompute penalties after due consideration and adjustment of advance taxes paid for both years under appeal and both appeals were partly allowed. assessee then moved Tribunal for reference under s. 256(1) of Act. assessee bad paid advance taxes leviable on registered firm for assessment years 1965-66 and 1966-67. For year 1966-67, it had paid its tax liabilities as registered firm in full. Its contention on that basis was that since no tax was payable by it for assessment year 1966-67, no penalty since no tax was payable by it for assessment year 1966-67, no penalty could be imposed upon it for that year and, accordingly, penalty of Rs. 8,680 calculated as amount of 2% of tax assessed as unregistered firm could not be levied. Third question under reference is, therefore, confined to assessment year 1966-67 only. Mr. K. N. Jain, learned counsel appearing for assessee, at first instance suggested that question, " whether penalty under section 271(1)(a) could be imposed even after charging interest under section 139 for delayed submission of return, " requires reframing so as to include other aspects of law. According to him, wider and real issue involved in case is: " Whether, on facts and in circumstances of case, penalty under section 271(1) is leviable or not? " As to whether penalty under s. 271(1)(a) could be imposed even after charging interest under s. 139 or not, is only one of aspects of real question as to whether, on facts and in circumstances of case, exercise of power to impose penalty under s. 27 l(1)(a) is legal or not. Penalty can be levied after interest is charged upon tax payable, at best, is aground like several other grounds to show that imposition of penalty upon assessee is invalid. Mr. B. P. Rajgarhia, learned senior standing counsel of Income-tax Department appearing for Commissioner of Incometax, Bihar, however, seriously objected to reframing of question on ground that if question is reframed, as suggested by Mr. Jain, it shall not be one arising out of Tribunal's order. Until decision of Supreme Court in case of CIT v. Scindia Steam Navigation Co. Ltd. [1961] 42 ITR 589, there was no judgment of Supreme Court as to what precisely may be meaning and import of words " any question of law arising out of " Tribunal's order. wide divergence of judicial opinion required review of various judgments of High Courts and, accordingly, after doing so, Supreme Court said (p. 606): "It will be seen from foregoing review of decisions that all High Courts are agreed that section 66 creates special jurisdiction, that power of Tribunal to make reference and right of litigant to require it, must be sought within four corners Of section 66(1), that jurisdiction of High Court to hear references is limited to questions which are properly referred to it under section 66(1), and that such jurisdiction is purely advisory and extends only to deciding questions referred to it. narrow ground over which High Courts differ is as regards question whether it is competent to Tribunal to refer, or High Court to decide, question of law which was not either raised before Tribunal or decided by it, where it arises on facts found by it. " Supreme Court noticed that one view was that words " any question of law arising out of " order of Tribunal signify that question must have been raised before Tribunal and considered by it, and other view was that all questions of law arising out of facts found would be questions of law arising out of order of Tribunal. Supreme Court summed up as follows (p. 611): " (1) When question is raised before Tribunal and is dealt with by it, it is clearly one arising out of its order. (2) When question of law is raised before Tribunal but Tribunal fails to deal with it, it must be deemed to have been dealt with by it, and is, therefore, one arising out of its order. (3) When question is not raised before Tribunal but Tribunal deals with it, that will also be question arising out of its order. (4) When question of law is neither raised before Tribunal nor considered by it, it will not be question arising out of its order notwithstanding that it may arise on findings given by it. Stating position compendiously, it is only question that has been raised before or decided by Tribunal that could be held to arise out of its order. " While applying above said law to facts of case before them, Supreme Court further observed (p. 611): " Now only question on which parties were at issue before income-tax authorities was whether sum of Rs. 9,26,532 was assessable to tax as income received during year of account 1945-46. That having been decided against respondents, Tribunal referred on their application under section 66(1), question, whether sum of Rs. 9,26,532 was properly included in assessee-company's total income for assessment year 1946- 47, and that was very question which was argued and decided by High Court. Thus it cannot be said that respondents had raised any new question before court. But appellant contends that while before income-tax authorities respondents disputed their liability on ground that amount in question had been received in year previous to year of account, contention urged by them before court was that even on footing that income had been received in year of account, proviso to section 10(2)(vii) had no application, and that it was new question which they were not entitled to raise. We do not agree with this contention. Section 66(1) speaks of question of law that arises out of order of Tribunal. Now question of law might be simple one, having its impact at one point, or it may be complex one, trenching over area with approaches leading to different points therein. Such question might involve more than one aspect, requiring to be tackled from different standpoints. All that section 66(1) requires is that question of law which is referred to court for decision and which court is to decide must be question which was in issue before Tribunal. Where question itself was under issue, there is no further limitation imposed by section that reference should be limited to those aspects of question which had been argued before Tribunal. It will be over-refinement of position to hold that each aspect of question is itself distinct question for purpose of section 66(1) of Act. That was view taken by this court in Commissioner of Income-tax v. Ogale Glass Works Ltd. [1954] 25 ITR 529 and in Zoraster and Co. v. Commissioner of Income-tax [1960] 40 ITR 552, and we agree with it. As question on which parties were at issue, which was referred to court under section 66(1), and decided by it under section 66(5) is whether sum of Rs. 9,26,532 is liable to be included in taxable income of respondents, ground on which respondents contested their liability before High Court was one which was within scope of question, and High Court rightly entertained it. " Supreme Court thus clarified that question of law in issue should not be taken to be inhibited by grounds or contentions which are raised before Tribunal. If question framed by Tribunal has got effect of narrowing down controversy to only one of several contentions which can be raised to question validity of imposition of penalty under s. 271(1)(a), applying law laid down by Supreme Court, it must be held that real issue may escape if other or alternative contentions are not permitted to be raised. As question referred to us in inhibited form covers only part of real controversy, it is pertinent and reasonable to argue that question should be reframed, so that real issue arising out of order of Tribunal may be decided. Some contentions like one, to which I shall presently advert, although arise out of order of Tribunal, were not argued before it. real controversy relates to question as to whether assessee is liable to penalty under s. 271(1)(a) or not. Mereley because some contentions were not raised before Tribunal, assessee cannot be denied opportunity to raise such contentions. Mr. Rajgarhia placed reliance on judgment in case of Kusumben D. Mahadevia v. Commissioner of Income-tax [1960] 39 ITR 540 (SC) as also on some judgments of High Courts and contended that question of law which may become available from facts before Tribunal cannot be allowed to be raised if it was not raised before Tribunal and decided by it. He submitted that question can be framed by this court only if contention sought to be raised is co-extensive with question of law referred to this court by Tribunal or is one which may be said to be included in it. Observations of Hidayatullah J. in Kusumben's case [1960] 39 ITR 540 (SC), as also in other cases decided by Supreme Court as to true scope of jurisdiction of High Court have been noticed by Supreme Court in case of CIT v. Scindia Steam Navigation Co. Ltd. [1961] 42 ITR 589 (SC), and as analysed by Venkatarama Aiyar J., who spoke for majority including justice Hidayatullah, found nothing in those cases that runs counter to conclusions referred to above. It may be over-refinement of position to hold that each aspect of question is itself distinct question. In words of one of distinguished judges of this court: " It is accepted principle of law that where question referred for opinion did not cover real controversy in issue, High Court could reframe question and decide real controversy. It cannot be gainsaid that controversy may involve different approaches for its solution. Where real controversy is, whether penalty levied under section 271(1)(a) was legal and valid, it can be viewed from different angles." (See Addl. CIT v. Dongarsidas Biharilal [1979] 116 ITR 897, 904). I am in respectful agreement with these observations. In instant case, real controversy in issue as to whether penalty could be levied under s. 27](1)(a) or not has been approached by Tribunal from particular angle, which approach learned counsel for assessee says requires no consideration by this court. Mr. Jain has fairly conceded that statutory interest realised under s. 139(8) has got no bearing or effect upon powers of competent authorities to impose penalty under s. 271(1)(a). Liability to pay penalty is not controlled by provisions under s. 139(8). only answer to question No. 1 referred to this court by Tribunal, therefore, is that penalty under s. 271 (1)(a) could be imposed even after charging interest under s. 139 for delayed submission of return. But real issue can still be approached from another angle. In such situation, on being reframed, it will not be new question of law, rather it shall be new point of view on same question which has been decided by Tribunal. Both Mr. Jain and Mr. Rajgarhia addressed us at length on question as reframed, i.e., whether, on facts and in circumstances of case, penalty under s. 271(1)(a) is leviable or not. According to Mr. Jain, s. 271(1)(a) speaks of default in furnishing return of total income under sub- s. (1) of s. 139 or by notice given under sub-s. (2) of s. 139 and failure to furnish it within time allowed and in manner required by sub-s. (1) of s. 139 or by such notice, as case may be. Under s. 139(1), every person, if his total income or total income of any other person in respect of which he is assessable under Act exceeded maximum amount which is not chargeable to income-tax during previous year is obliged to furnish return of his income or income of such other person during previous year in accordance with law before expiry of four months from end of previous year or where there is more than one previous year from end of previous year which expired last before commencement of assessment year, or before 30th June of assessment year, whichever is later, if person concerned is one whose total income includes any income from business or profession, and in case of every other person by 30th day of June of assessment year. If no return is filed on or before due date there is default. Except in accordance with proviso to s. 139(1), in no other case return of income required to be filed under s. 139(1) can be filed after due date. return filed under s. 139(2) or under s. 139(4) cannot be said to be return filed under s. 139(1). Thus, even if return is filed under s. 139(4), default in filing return under s. 139(1) is not removed. In fact, beginning and end of default in filing of return under s. 139(1) coincide. Either return under s. 139(1) is filed or not filed at all. That being position, according to Mr. Jain, it is not possible to quantify amount of penalty on basis of amount of tax payable by defaulting assessee for every month during which default continued. In other words, once there is default in filing return under s. 139(1) of Act, there is no continuity attached to it and if there is any, it is ad infinitum. In absence of terminus provided under s. 271 and/or any other provision of Act, imposition of penalty is neither practicable nor possible. Mr. Rajgarhia, on other hand, contended that qualifying expression, return of total income of assessment year concerned must be deemed to be satisfied either by filing of return under s. 139(4) of Act or if no return is filed at all with conclusion of assessment proceeding because penalty is leviable upon assessed tax in addition to amount of tax payable. After detailed arguments from both sides were heard, Mr. Jain, however, indicated that he was not pressing his contention. In view of this stand of Mr. Jain, perhaps, we are not required to probe into it, but to leave this controversy at that will mean to leave this court's controversial view in judgment of S.P. Sinha J., "The default cannot be carried over beyond assessment year. Like assessment of income to income-tax which must remain confined to assessment year, assessment of penalty must also remain confined to assessment year ", as it is. very purpose for which we constituted Full Bench would stand defeated if we do not predicate into this question. I propose, therefore, to deal briefly, but not dismissively, with this aspect. Mr. Jain started by reminding us well-settled principle of construction of taxing statutes that when provision is ambiguous or is capable of two meanings, construction beneficial to citizen should be adopted and referred to Division Bench decision of Calcutta High Court in CIT v. Vegetable Products Ltd. [1971] 80 ITR 14 and judgment of Supreme Court affirming said Calcutta decision in CIT v. Vegetable Products Ltd. [1973] 88 ITR 192 for this purpose. Without disputing this rule of interpretation of statutes, Mr. Rajgarhia, on other hand, drew our attention to judgment of Supreme Court in Rajputana Agencies Ltd. v. CIT [1959] 35 ITR 168 to read passage from Maxwell on Interpretation of Statutes, 10th edition, page 284, which is quoted with approval in said case: " tendency of modern decisions, upon whole, is to narrow down materially difference between what is called strict and beneficial construction. " This and like rules of interpretation of statutes have been variously stated. No doubt one has to look merely on what is clearly said in taxing statute. There is no room for any intendment. There is no equity about tax. There is no presumption as to tax. Nothing has to be read in, nothing has to be implied, one can only look fairly at language used. (See Cape Brandy Syndicate v. IRC [1921] 1 KB 64). Even so fundamental rule of construction is same for all statutes, whether fiscal or otherwise. To arrive at real meaning, it is always necessary to get exact conception of aim, scope and object of whole Act. [See Heydon's case [1584] 3 Co Rep 7b; Att. Gen. v. Carlton Ban [1899] 2 UB 158]. With these cautions, I shall now proceed to read words of relevant provisions of Act and to test correctness or otherwise of contention of Mr. Jain. Section 139, in its relevant parts, as existing in relevant year, runs as follows: " 139. (1) Every person, if his total income or total income of any other person in respect of which he is assessable under this Act during previous year exceeded maximum amount which is not chargeable to income-tax, shall furnish return of his income or income of such other person during previous year in prescribed form and verified in prescribed manner and setting forth such other particulars as may be prescribed- (a) in case of every person whose total income, or total income of any other person in respect of which he is assessable under this Act, includes any income from business or profession, before expiry of, six months from end of previous year or where there is more than one previous year, from end of previous year which expired last before commencement of assessment year, or before 30th day of June of assessment year, whichever is later; (b) in case of every other person, before 30th day of June of assessment year: Provided that, on application made in prescribed manner, Income-tax Officer may, in his discretion, extend date for furnishing return- (i) in case of any person whose total income includes any income from business or profession previous year in respect of which expired on or before 31st day of December of year immediately preceding assessment year, and in case of any person referred to in clause (b), up to period not extending beyond 30th day of September of assessment year without charging any interest; (ii) in case of any person whose total income includes any income from business or profession previous year in respect of which expired after 31st day of December of year immediately preceding assessment year 31st day of December of year immediately preceding assessment year up to 31st day of December of assessment year without charging any interest; and (iii) up to any period falling beyond dates mentioned in clauses (i) and (ii), in which case, interest at six per cent. per annum shall be payable from 1st day of October or 1st day of January, as case may be, of assessment year to date of furnishing of return- (a) in case of registered firm or unregistered firm which has been assessed under clause (b) of section 183, on amount of tax which would have been payable if firm had been assessed as unregistered firm; (b) in any other case, on amount of tax payable on total income, reduced by advance tax, if any, paid or by any tax deducted at source, as case may be....... (2) In case of any person who, in Income-tax Officer's opinion, is assessable under this Act, whether on his own total income or on total income of any other person during previous year, Income-tax Officer may, before end of relevant assessment year, serve notice upon him requiring him to furnish, within thirty days from date of service of notice, return of his income or income of such other person during previous year, in prescribed form and verified in prescribed manner and setting forth such other particulars as may be prescribed: Provided that on application made in prescribed manner, Income-tax Officer may, in his discretion, extend date for furnishing of return, and when date for furnishing return, whether fixed originally or on extension, falls beyond 30th day of September or, as case may be, 31st day of December of assessment year, provisions of sub-clause (iii) of proviso to sub-section (1) shall apply..... (4) Any person who has not furnished return within time allowed to him under sub-section (1) or sub-section (2) may, before assessment is made, furnish return for any previous year at any time before end of four assessment years from end of assessment year to which return relates, and provisions of sub-clause (iii) of proviso to sub-section (1) shall apply in every such case...... (7) No return under sub-section (1) need be furnished by any person for any previous year, if he has already furnished return of income for such year in accordance with provisions of sub-section (2). (8) Notwithstanding anything contained in clause (iii) of proviso to sub- section (1), Income-tax Officer may, in such cases and under such circumstances as may be prescribed, reduce or waive interest payable by any person under any provision of this section." This section has undergone some amendments and, as it stands today in its relevant part, it runs as follows: " Return of income.-(1) Every person, if his total income or total income of any other person in respect of which he is assessable under this Act during previous year exceeded maximum amount which is not chargeable to income-tax, shall furnish return of his income or income of such other person during previous year in prescribed form and verified in prescribed manner and setting forth such other particulars as may be prescribed- ' (a) in case of every person whose total income, or total income of any other person in respect of which he is assessable under this Act, includes any income from business or profession, before expiry of four months from end of previous year or where there is more than one previous year, from end of previous year which expired last before commencement of assessment year, or before 30th day of June of assessment year, whichever is later; (b) in case of every other person, before 30th day of June of assessment year:... (2) In case of any person who, in Income-tax Officer's opinion is assessable under this Act, whether on his own total income or on total income of any other person during previous year, Income-tax Officer may, before end of relevant assessment year, issue notice to him and may, before end of relevant assessment year, issue notice to him and serve same upon him requiring him to furnish, within thirty days from date of service of notice, return of his income or income of such other person during previous year, in prescribed form and verified in prescribed manner and setting forth such other particulars as may be prescribed: Provided that, on application made in prescribed manner, Income-tax Officer may, in his discretion, extend date for furnishing return, and, notwithstanding that date is so extended, interest shall be chargeable in accordance with provisions of sub-section (8)... (4)(a) Any person who has not furnished return within time allowed to him under sub-section (1) or sub-section (2) may, before assessment is made, furnish return for any previous year at any time before end of period specified in clause (b) and provisions of sub-section (8) shall apply in every such case. (b) period referred to in clause (a) shall be- (i) where return relates to previous year relevant to any assessment year commencing on or before 1st day of April, 1967, four years from end of such assessment year; (ii) where return relates to previous year relevant to assessment year commencing on 1st day of April, 1968, three years from end of assessment year; (iii) where return relates to previous year relevant to any other assessment year, two years from end of such assessment year.....-. (8)(a) Where return under sub-section (1) or sub-section (2) or subsection (4) for assessment year is furnished after specified date, or is not furnished, then [whether or not Income-tax Officer has extended date for furnishing return under sub-section (1) or sub-section (2)], assessee shall be liable to pay simple interest at twelve per cent. per annum, reckoned from day immediately following specified date to date of furnishing of return, or, where no return has been furnished, date of completion of assessment under section 144, on amount of tax payable on total income as determined on regular assessment as reduced by advance tax, if any, paid, and any tax deducted at source: Provided that Income-tax Officer may, in such cases and under such circumstances as may be prescribed, reduce or waive interest payable by any assessee under this sub-section." In instant case for year 1965-66, return of income was due by June 30, 1965, and it was filed on October 17, 1966, and for year 1966-67, return was due on June 30, 1966, and it was filed on August 28, 1968. Evidently law applicable was as existed for years 1965-66 and 1966-67 as quoted above. Mr. Jain has submitted that in case in which there is default in furnishing return under sub-s. (1) or sub-s. (2) of s. 139, for purpose of interest, terminus is indicated in words " reckoned from date immediately following specified date to date of furnishing of return or where no return has been furnished, date of completion of assessment under s. 144, on amount of tax payable on total income as determined on regular assessment, as reduced by advance tax, if any, paid, and any tax deducted at source ", in sub-s. (8)(a) of s. 139. Under Explanation at foot of sub-s. (8)(a) of s. 139, " I specified date ", in relation to return for assessment year, has been defined. Thus, according to Mr. Jain, both date from which interest shall be reckoned and date up to which it shall be charged are indicated and this leaves no ambiguity in so far as charging of interest is concerned. Such words, however, are not available in s. 271(1) and/or any other provision of Act in respect of imposition of penalty. Section 271(1) at relevant time read as follows: " 271. (1) If Income-tax Officer or Appellate Assistant Commissioner, in course of any proceeding under this Act, is satisfied that any person (a) has without reasonable cause failed to furnish return of total income which he was required to furnish under sub-section (1) of section 139 or by, notice given under sub-section (2) of section 139 or section 148 or has without reasonable cause failed to furnish it within time allowed and in manner required by sub-section (1) of section 139 or by such notice, as case may be, or...... he may direct that such person shall pay by way of penalty,- (i) in cases referred to in clause (a), in addition to amount of tax, if any, payable by him, sum equal to two per cent. of tax for every month during which default continued, but not exceeding in aggregate fifty per cent. of tax; " Subsequently cl. (i) was substituted by Direct Taxes (Amendment) Act, 1974, with retrospective effect from date of commencement of 1961 Act, effect being to substitute " assessed tax " for " tax " and to insert Explanation. After amendment, this provision reads as follows: " Failure to furnish returns, comply with notices, concealment of income, etc.-(1) If Income-tax Officer or Appellate Assistant Commissioner or Commissioner (Appeals), in course of any proceedings under this Act, is satisfied that any person- (a) has without reasonable cause failed to furnish return of total income which he was required to furnish under sub-section (1) of section 139 or by notice given under sub-section (2) of section 139 or section 148 or has without reasonable cause failed to furnish it within time allowed and in manner required by sub-section (1) of section 139 or by such notice, as case may be, or (b) has without reasonable cause failed to comply with notice under sub-section (1) of section 142 or sub-section (2) of section 143 or fails to comply with direction issued under sub-section (2A) of section 142, or (c) has concealed particulars of his income or furnished inaccurate particulars of such income, he may direct that such person shall pay by way of particulars of such income, he may direct that such person shall pay by way of penalty,- (i) in cases referred to in clause (a), (a) in case of person referred to in sub-section (4A) of section 139, where total income in respect of which he is assessable as representative assessee does not exceed maximum amount which is not chargeable to income-tax, sum not exceeding one per cent. of total income computed under this Act without giving effect to provisions of sections 11 and 12, for each year or part thereof during which default continued; (b) in any other case, in addition to amount of tax, if any, payable by him, sum equal to two per cent. of assessed tax for every month during which default continued. Explanation.-In this clause ,'assessed tax' means tax as reduced by sum, if any, deducted at source under Chapter XVII-B or paid in advance under Chapter XVII-C." According to Mr. Jain, his case will be one falling under s. 271 (1)(a)(i)(b). " sum equal to 2 per cent. of assessed tax for every month during which default continued ", can be determined and quantified only if date on which default shall cease is known. Sub-s. (4) of s. 139, Mr. Jain has submitted, is sui generis. return filed under s. 139(4) is not return either under s. 139(1) or under s. 139(2). Section 271(l)(a) has referred to s. 139(1) and (2) but has not referred to s. 139(4). It has also not referred to default ending either with filing of return under s. 139(4) or with date of completion of assessment under s. 144 as provided under s. 139(8). It will be going beyond words of penal provision in taxing statute to read terminus with filing of return or completion of best judgment assessment under s. 144. above argument is both ingenious and intelligent but, as I shall presently demonstrate, has got no merit. Before Mr. Jain's argument is accepted, it shall have to be concluded that return of total income for particular year of assessment under sub-s. (1) of s. 139 or under sub-s. (2) of s, 139 is different from return of total income which assessee may file under s. 139(4). Reference to sub-s. (1) of s. 139 or to notice under sub-s. (2) of s. 139 has been made in s. 271(1)(a) for only purpose of identifying default which shall attract penalty. These sections, inter alia, are referred to for reckoning date from which default shall be calculated. Inclusion or reference to these sections makes beginning of default known. default is caused on account of non-filing of return of total income. Once return is filed under s. 139(4), ITO is obliged to take that return into consideration for purpose of assessment. Provision for best judgment assessment as engrafted under s. 144 shall not be attracted in such case. default in filing return of income comes to end no sooner return is filed under sub-s. (4) of s. 139. In case in which return of income is not filed at all not even under sub-s. (4) of s. 139, ITO is still required to make assessment under s. 144. default on account of non-filing of return of income shall automatically come to end with best judgment assessment. This process has to be repeated year after year. One assessment will be followed by another assessment. Each assessment year shall require filing of return of income. default shall remain attached to return of income of each assessment year. Will then, like return of income remaining confined to assessment year, default shall also remain circumscribed within 12 months of relevant assessment year? According to S. P. Sinha J. (as he then was), in case of Addl. CIT v. Dongarsidas Biharilal [1979] 116 ITR 897 (Pat), default cannot be carried over beyond 12 months of relevant assessment year. According to S. Sarwar Ali J., in that very case, period of default for purpose of levying penalty cannot be confined to assessment year. Before I deal with question posed above, I propose to advert to yet another aspect of matter. Mr. Jain has emphasised that imposition of penalty is linked with tax payable. If tax is not payable by assessee, no penalty can be imposed. As I have pointed out earlier, assessee is registered firm. Admittedly, assessee paid advance tax for assessment year 1965-66 as also assessment year 1966-67. For assessment year 1966- 67, advance tax paid was enough to discharge -tax liability of firm. As to whether quantification of penalty for said assessment year is in accordance with law or not, I shall separately examine while examining third question referred to us. Confining to question as to whether imposition of penalty on registered firm shall still be permissible, even if there is no tax liability, I find it difficult to accept Mr. Jain's contention. In case of Khusiram Murarilal v. CIT [1954] 25 ITR 572 (Cal), question which fell to be determined was whether imposition of penalty on registered firm under s. 28(1)(b) of Indian I.T. Act, 1922, was justified in law. It was urged in that case on behalf of assessee that inasmuch as under s. 28(1)(b), person can be made liable to pay penalty in addition to amount of income-tax and super tax, if any, payable by him in cases falling under clauses (b) and (c), no order for payment of penalty can be made against registered firm, because under I.T. Act, no tax is made payable by firm. It was case where no tax liability had been created on registered firm although individuals constituting firm were each separately liable to pay taxes. court observed (p. 580):........ even when construed by its own language, concluding paragraph of section 28(1) cannot be said to make it condition precedent that person must be liable to pay some income-tax or it may be also super-tax if he is to be made liable for penalty." It was also observed: "It was not really necessary for clause (d) of proviso to enact specifically that registered firm would be liable to pay penalty despite fact that it could not be charged and was not, in fact, charged to income-tax or super tax. whole argument of Dr. Sen Gupta was that concluding paragraph of section 28(1) had left gap which had been attempted to be filled up by clause (d) of proviso, but attempt had not been successful. In my view, gap which undoubtedly existed in concluding paragraph of section 28(1) was only absence of provision regarding quantum of penalty that could be levied on registered firm because quantum depends upon amount of income-tax payable." In case of CIT v. Angidi Chettiar [1962] 44 ITR 739 (SC), above- quoted observations of Calcutta High Court were approved by Supreme Court and law was stated in following words (p. 744): " In our view, learned Chief justice was right in so enunciating law. " In our view, learned Chief justice was right in so enunciating law. Under section 23(5) of Indian Income-tax Act, before it was amended in 1956, in case of registered firm, tax payable by firm itself was not required to be determined but total income of each partner of firm including therein share of its income, profits and gains of previous year was required to be assessed and sum payable by him on basis of such assessment was to be determined. But this was merely method of collection of tax due from firm. penalty provisions under section 28 would, therefore, in event of default contemplated by clause (a), (b) or (c) be applicable in case of assessment of registered firm. If registered firm is exposed to liability of paying penalty, by committing any of defaults contemplated by clause (a), (b) or (c) by virtue of section 44, notwithstanding dissolution of firm, assessment proceedings are liable to be continued against registered firm, as if it has not been dissolved." It is noticeable that in computing quantum of penalty, amount of tax payable has to be kept in mind and as provided under subs. (3), clause (d) of s. 271, penalty imposed must not exceed in aggregate twice amount of tax sought to be evaded. It must be sum payable at time of imposition of penalty. If at that time, original assessment was there, it shall be calculated on that basis. If, on other hand, it was not there and there has been reassessment, it shall vary accordingly. In case of CIT v. Vegetable Products Ltd. [1973] 88 ITR 192 (SC), interpretation of s. 271(1)(a)(i) had fallen for consideration. In that case, for assessee's assessment for assessment year 1960-61, relevant account year ending on December 31, 1959, ITO issued notice under s. 22(2) of Indian I.T. Act, 1922, on June. 1, 1960. same was served on assessee on June 13, 1960. notice required assessee to submit its return on or before July 18, 1960. On July 18, 1960, assessee moved for extension of time for submitting its return. ITO extended time by two months and at same time, he informed assessee that no further time would be allowed. assessee failed to furnish his return within extended time. Thereafter, notice under s. 28(3) of 1922 Act was served on assessee on January 16, 1961. On very next date, viz. January 17, 1961, assessee filed its return for assessment year in question. assessment was completed by ITO on October 31, 1962. Meanwhile, on April 1, 1962, I.T. Act, 1961, came into force. As under provisions of s. 297(2)(g) of Act proceedings for imposition of penalty had to be initiated and completed under (new) Act, fresh notice under s. 274(1) of Act was served on assessee. assessee objected to validity of notice. In determining penalty due from assessee, ITO took into consideration not amount demanded under s. 156 of Act but amount assessed under s. 143 of Act. In appeal, AAC confirmed order of ITO. On further appeal, Tribunal came to conclusion that penalty under s. 271(1)(a)(i) is to be levied on tax assessed minus amount paid under provisional assessment order. On basis of that finding, it determined penalty payable by assessee. It was contended on behalf of Revenue before Supreme Court that on proper construction of s. 271(1)(a)(i), it would be seen that penalty had to be determined on basis of tax assessed under s. 143 of Act. It was submitted that if that is not true construction, then effectiveness of section may be taken away by assessee paying tax due by him day before demand notice is served on him. This contention found support from decisions of Lahore High Court in Vir Bhan Bansi Lal v. CIT [1938] 6 ITR 616 and Delhi High Court in CIT v. Hindustan Industrial Corporation [1972] 86 ITR 657. Assessee's contention on other hand was that penalty can be imposed only on amount payable under s. 156. This view found support from decision of Mysore High Court in Annaiah v. CIT [1970] 76 ITR 582 (Mys). Submission on behalf of assessee further was that if interpretation placed by Revenue on s. 271(1)(a)(i) is accepted as correct, result would be that advance tax paid or taxes deducted at source cannot be taken into consideration in determining penalty payable. Supreme Court observed (p. 195): " There is no doubt that acceptance of one or other interpretation sought to be placed on section 271(1)(a)(i) by parties would lead to some inconvenient result, but duty of court is to read section, understand its inconvenient result, but duty of court is to read section, understand its language and give effect to same. If language is plain, fact that consequence of giving effect to it may lead to some absurd result is not factor to be taken into account in interpreting provision. It is for legislature to step in and remove absurdity. On other hand, if two reasonable constructions of taxing provision are possible, that construction which favours assessee must be adopted. This is well-accepted rule of construction recognised by this court in several of its decisions. Hence, all that we have to see is, what is true effect of language employed in section 271(1)(a)(i). If we find that language to be ambiguous or capable of more meanings than one, then we have to adopt that interpretation which favours assessee, more particularly so because provision relates to imposition of penalty." Supreme Court determined meaning of expressions used under s. 271(1)(a)(i) and held (p. 196): " word'assessed' is term often used in taxation law. It is used in several provisions in Act. Quantification of tax payable is always referred to in Act as tax'assessed'. tax payable is not same thing as tax assessed. tax payable is that amount for which demand notice is issued under section 156. In determining tax payable, tax already paid has to be deducted. Hence, there can be no doubt that expression'the amount of tax, if any, payable by him' referred to in first part of section 271(1)(a)(i) refers to tax payable under demand notice. We next come to question what is meaning to be attached to words'the tax' found in latter part of that provision. It may be noted that expression used is not'tax' but'the tax'. definite article'the' must have reference to something said earlier. It can only refer to tax, if any, payable by assessee mentioned in first part of section 271(1)(a)(i)...... That expression can be reasonably understood as referring to expression earlier used in provision, namely,'the amount of tax, if any, payable' by assessee. At any rate, provision in question is capable of more than one reasonable interpretation. Two High Courts, namely, Calcutta and Mysore, have taken view that expression'the tax', in section 271(1)(a)(i) refers to'the tax, if any, payable' (by assessee) mentioned in earlier part of section. It is true that Lahore and Delhi High Courts have taken different view. But view taken by Calcutta and Mysore High Courts cannot be said to be untenable view. Hence, particularly in view of fact that we are interpreting not merely taxing provision but penalty provision as well, interpretation placed by Calcutta and Mysore High Courts cannot be rejected. Further, as seen earlier, consequences of accepting interpretation placed by Revenue may lead to harsh results. " There is no difficulty in recognising as to when default would arise. Section 271(1)(a) has indicated three situations, namely, (i) non-furnishing of return as required under sub-s. (1) of s. 139, or (2) nonfurnishing of return even after notice under sub-s. (2) of s. 139 or s. 148, or (3) non-furnishing of return within time allowed by ITO. Similarly clause (b) of said section states about default caused by non-compliance with notice under sub-s. (1) of s. 142 or sub-s. (2) of s. 143 or direction issued under sub-s. (2A) of s. 142. Clause (c) of said section refers to Act of concealment of particulars of income or furnishing of inaccurate particulars of such income. Liability as to penalty for not filing return of income as provided under sub-s. (1) of s. 139 is unconnected with liability created on account of not filing return of income in response to notice under sub-s. (2) of s. 139. Default in not filing return of income as required under sub-s. (1) s. 139 shall, however, survive until return of income is filed in response to notice under s. 139(2) or under s. 139(4). return of income is same whether filed under s. 139(1) or in response to notice under s. 139(2) or under s. 139(4). S. P. Sinha J. in Addl. CIT v. Dongarsidas Biharilal [1979] 116 ITR 897 (Pat), has said in this regard (p. 904): " provisions of this section, in so far as it concerns idea of default, are clear and unambiguous. Whenever assessee fails either completely or partially to furnish, without any reasonable cause, return of total income which he was required to furnish under sub-s. (1) or subs. (2) of s. 139 or under s. 148 of Act within time allowed, he is in default. difficulty, however, arises in so far as it concerns period of default, i.e., how long default will continue. starting point of default is known, being day following date on which he should have furnished return but failed to do so. termination point, however, is not specified. Mr. Jain has advanced similar argument as one considered by S.P. Sinha J. that for levy of interest in terms of s. 139(8) of Act, it is specifically provided " from day immediately following specified date to date of furnishing of return, where no return has been furnished, date of completion of assessment under section 144". No difficulty in computing period of default for purpose of penalty would have arisen had there been similar provisions made in this regard. He has submitted on this basis that provisions contained in s. 271(1)(a)(i) are unworkable and even if legislature intended to levy penalty for default in filing return of income, intention has failed. Sinha J., in this context, observed (p. 906): "The plain meaning of provisions contained in sub-clause (i) under section 271(1)(a), as it appears to me, is that for default under s. 271(1)(a), quantum of penalty shall be 2% of assessed tax for every month of default and may go up to 50% of assessed tax. said provision only describes limits within which quantum of penalty would vary. It has no bearing on question as to how long could default go. I, therefore, think that provisions contained in sub-clause (i) under s. 271(1)(a) do not provide answer to question in issue. " After saying so, Sinha J. proceeded further and said (p. 907): I, therefore, think that period of default for purpose of levying penalty in terms of section 271 (1)(a)(i) is determinable. " " In substance, therefore, I think, for levying penalty in terms of section 271(1)(a) of Act, period of default starts on day following due date for compliance with terms of s. 139(1) or s. 139(2) of Act and remains circumscribed within twelve months of relevant assessment year. Similar would be position where steps have been taken to tax escaped income under section 148 of Act. There also period of default in filing required return of income will remain circumscribed within twelve months of year in which steps for reassessment of escaped income have been taken." Is it so that answer to question in issue is not provided in s. 271(1)(a)? relevant and pregnant words are, " for every month during which default continued ". It is default in filing return of income as provided in words " failed to furnish return of total income ". So long as return of total income of particular assessment year is not filed, default continues. day it is filed, may be under s. 139(4), it ends. If it is not filed at all and assessment is completed under s. 144, default must be assumed to have come to end because in lieu of return of total income, taxing officer, at this stage, is required to make assessment of total income or loss to best of his judgment, before determining sum payable by assessee or refundable to assessee on basis of such assessment. It is thus obvious that return of income or assessment of amount of income or loss under s. 144 of Act shall alone terminate default. This conclusion, in my opinion, is in no way against interest of assessee. maximum limit of quantum of penalty is prescribed. default may be found to have continued for several years, yet penalty cannot exceed ceiling imposed under Act. But if it is kept confined to period of twelve months of assessment year, sum equal to 2% of assessed tax may not even touch ceiling. Unless some change is made in language of section, it is not possible to circumscribe, period of penalty to twelve months only. Madhya Pradesh High Court considered case in which return of income was not filed as provided under s. 139(1). No return was filed even after notice under s. 139(2), but was filed much later, evidently under s. 139(4). It concluded that default as prescribed under s. 271(1)(a) continued till date of filing of return. Incidentally Patna case in Addl. CIT v. Bihar Textiles [1975] 100 ITR 253 (Pat) was considered by Madhya Pradesh High Court. Patna view was that once notice under s. 139(2) of Act has been issued to assessee, there cannot be any penalty under s. 271(1)(a) for failure to furnish return as required by s. 139(1). Madhya Pradesh Court noticed that almost every other High Court held against it (See Chunnilal & Bros. v. CIT [1979] 119 ITR 199 (MP); 1979 Tax LR 101). Commenting upon said v. CIT [1979] 119 ITR 199 (MP); 1979 Tax LR 101). Commenting upon said Patna view, Bombay High Court said in CIT v. D.V. Save [1979] 119 ITR 266 276-278 (Bom): " However, in face of all above catena of decisions, discordant note was struck by Patna High Court... arguments which appealed to Patna High Court which have been extracted in paragraph quoted above have been fully dealt with in judgments of Rajasthan, Delhi and Andhra Pradesh High Courts. All other refinements of various arguments and their several facets which could have been urged on behalf of assessee, have been studiously considered by these High Courts and properly dealt with. None of these arguments, nor any of facets thereof, have been accepted by these High Courts and in our view these three High Courts have taken correct view of statutory provision and interpretation put on provision and view taken by Patna High Court applying same does not qualify as reasonable and possible interpretation which would bring into play principle in Vegetable Products Ltd.'s case [1973] 88 ITR 192 (SC). " I have given my careful consideration and I have no manner of doubt that defaults envisaged by s. 271(1)(a) are not to be classified, as Mr. Jain has been trying to do, by referring to particular provisions of ss. 139(1), 139(2) or s. 148. penalty for default under s. 139(1) can be imposed even if return under s. 139(2) or under s. 139(4) is filed. Similarly, default caused on account of not responding to notice under s. 139(2) or s. 148 can attract penal consequences. In my view, period of default reckoned from due date for filing return has to be taken to have come to end with filing of return of income, if it is filed before best judgment assessment under s. 144 and within period prescribed under s. 139(4) and in case of no return of income filed at all with assessment of income as prescribed under s. 144. In this respect, I am in respectful disagreement with view taken in case of Additional CIT v. Bihar Textiles [1975] 100 ITR 253 (Pat) and view taken by S. P. Sinha J. in Addl. CIT v. Dongarsidas Biharilal [1979] 116 ITR 897 (Pat). view that I have taken must necessarily lead to answering first question referred to us against assessee, both in its original form as also reframed. penalty on facts and in circumstances of case is leviable under s. 271(1) even after charging interest under s. 139. Period of default is not circumscribed by period of assessment year and it ends either with filing of return of income in accordance with law or with assessment of income in lieu thereof under s. 144. provisions as made, suffer from no ambiguity and is sufficiently workable keeping in view ceiling on quantum of penalty. Mr. Jain has stated that, on facts and in circumstances of this case, second question, namely, whether, on facts and in circumstances of this case, Income-tax Officer has forfeited his rights to impose penalty under section 271(1)(a) by not completing assessment under section 144 does not arise. This question, therefore, needs no discussion. There is no manner of doubt that right to impose penalty cannot be forfeited except in case in which it is barred under some law like law of limitation. This question has to be answered against assessee. Mr. Jain has, however, pressed third question referred to us by Tribunal, namely, whether, on facts of case, penalty of Rs. 8,680 calculated on basis of tax as on unregistered firm could be levied in this case when no tax was payable by it as registered firm. This amount of penalty calculated on basis of 2 per cent. of tax for every month during which default continued has been imposed for assessment year 1966-67. assessee's case in this regard is that it paid advance taxes as registered firm and its entire tax liability for assessment year 1966-67 had been fully discharged by payment of advance taxes. In case of CIT v. Vegetable Products Ltd. [1973] 88 ITR 192 (SC), Supreme Court has already held that if no tax is payable, no penalty can be imposed. According to Mr. Jain, only mode of calculating amount of penalty for assessment year 1966-67 will be one provided under s. 271(1)(i)(b) read with Explanation. clear mandate of Legislature is that penalty will be sum equal to 2 per cent. of assessed tax for every month during which default continued. assessed tax has been defined in Explanation to mean " tax as reduced by sum, if any, deducted at source under Chapter XVII-B or paid in advance under Chapter XVII-C ". assessee paid advance taxes under Chapter XVII-C and thus there was no assessed tax available to authority concerned upon which he would have determined quantum of penalty. In this view of matter, imposition of penalty for assessment year 1966-67 is illegal. Mr. Jain has further submitted that assessed tax in case of assessee will be tax payable as registered firm. Advance taxes were to be paid, accordingly, by assessee and it so paid tax to satisfy its tax liability. According to Mr. Jain, sub-s. (2) of s. 271 opens with words, " when person liable to penalty is registered firm ". This liability to penalty is evidently to be assessed on assessed tax, that is to say, tax as reduced by sum paid in advance. He has supported his submissions by decision of Gauhati High Court in CIT v. Maskara Tea Estate [1981] 130 ITR 955. It has been held in said case that non-obstante clause in s. 271(2) does not override provisions of s. 271(1)(i) and if person committing default under cl. (a) of s. 271(1) is registered firm, its case does not fall automatically under subs. (2) of s. 271. Section 271(1)(i) does not exclude registered firms but incorporates "all persons ". One cannot skip over relevant cl. (i) and jump to s. 271(2) to stamp registered firm with liability in absence of any clear intendment expressed in section. Gauhati High Court has followed Madras High Court in Additional CIT v. Murugan Timber Depot [1978] 113 ITR 99, and dissented from view of Gujarat High Court in CIT v. Ochhavlal and Co. [1976] 105 ITR 518. It has, however, not referred to judgment of Calcutta High Court in CIT v. Priya Gopal Bishoyee [1981] 127 ITR 778. After expressing view as above, Gaubati Court had said (p. 965): " view that we have expressed finds ample support from observations of their Lordships in CIT v. Vegetable Products Ltd. [1973] 88 ITR 192 (SC) ". Calcutta High Court considered question, whether in case of registered firm which was liable to penalty under s. 271(1)(a) read with s. 271(2) of I.T. Act, 1961, principle of decision in Vegetable Products Ltd.'s case [1973] 88 ITR 192 (SC), is not applicable for computing penalty and answered it in negative. Sabyasachi Mukharji J., speaking for court, noticed view of Supreme Court that expression I amount of tax, if any, payable by him " in earlier part of s. 271(1)(a)(i) referred to tax payable under notice of demand and words "the tax " in latter part of provision would only refer to " tax ", if any, " payable " by assessee mentioned in earlier part of s. 271(1)(a)(i) of Act and retrospective amendment subsequent to decision of Supreme Court in Act by Direct Taxes (Amendment) Act, 1974, under which Explanation was added to s. 271 (1)(i) defining assessed tax to mean tax as reduced by sum, if any, deducted in advance. legal fiction that is created by sub-s. (2) of s. 271 was noticed by him upon which he concluded (p. 781): "Therefore, for purpose of imposition of penalty, firm, even if it is registered, and if it has committed default as contemplated under s. 271, it would be treated on same basis as if it was unregistered firm ". Before Calcutta High Court, it was case in which at date when penalty was imposed, there would have been no assessed tax if it was registered firm, but if it was unregistered firm and for purpose of determination of imposition of penalty it would be treated as unregistered firm and if it was so treated, fictionally there was tax liability. Mukharji J. said (p. 781): " In this case, default upon which penalty was imposed was delay in submission of return. Therefore, fact is that payment of assessed tax on basis of registered firm would not exonerate assessee from imposition of penalty on basis that it was unregistered firm calculating default for months for which default had continued. similar question was considered by Madhya Pradesh High Court. answer given by it in case of Delux Publishing Co. v. Addl. CIT [1981] 127 ITR 782, is (p. 786): "By s. 271(2) of Act, fiction is created and even if person liable to penalty is registered firm, penalty imposable under s. 271 of Act shall be same amount as would be imposable on that firm if that firm were unregistered firm. Therefore, in case of registered firm tax assessable has to be worked out as if it were unregistered firm and on that basis penalty has to be calculated because fiction created has to be carried to its logical extent.... In our opinion, in cases covered by s. 271(2) of Act, in order to calculate penalty, tax payable by assessee on income assessed has to be determined on basis that assessee is unregistered firm and penalty has to be calculated on tax so determined." similar view has been expressed by Bombay High Court in CIT V. India Automobiles [1983] 143 ITR 774 (Bom). In words as used in said decision (p. 776): "Now, on perusal of sub-s. (2) of s. 271, it appears to us that where registered firm becomes liable to penalty, for purpose of determining penalty imposable, fiction is introduced by said sub-section that said registered firm is to be treated as unregistered firm. If such fiction is introduced, there is no reason why it should not be carried to its logical conclusion, which would be that, in computation of its total income, assessee-firm would be entitled to deduction of amount equivalent to annuity deposit which it would have had to pay had it been unregistered firm. Once firm is treated for purposes of penalty as unregistered firm, there is no reason why it should be denied such benefits by way of deduction as are available to unregistered firm. It is true that, being registered firm, it was really not required to pay any annuity deposit at all, but that, to our mind, would make no difference and it would be entitled to deduction, in computation of its total income for purposes of determination of tax payable, on which penalty is based, of amount of annuity deposit which it would have been required to pay, had it, in fact, been unregistered firm." Bombay High Court was really considering question as to whether deduction under s. 280-0 of amount of annuity deposit which assessee might have paid if it was unregistered firm, whether paid or not, could be permitted to be deducted or not in computing penalty imposable on assessee (registered firm) under s. 271(1)(a) read with s. 271(2) of I.T. Act. Punjab High Court in CIT v. Hari Chand Hans Raj [1981] 128 ITR 467 at p. 471, has held even though registered firm has been granted certain concessions under provisions of Act regarding payment of income-tax, yet Legislature in its wisdom thought that if such firm misuses concession given, so as to default and incurs imposition of penalty, in that case concession given shall be withdrawn. This has been precisely provided in sub-s. (2) of s. 271." In Jain Brothers v. Union of India [1970] 77 ITR 107, Supreme Court held that levy of penalty on defaulting registered firm as if it was unregistered does not involve discrimination. In words of Supreme Court (p. 118): " It was, however, open to legislature to say that once registered firm committed default attracting penalty, it should be deemed or considered to be unregistered firm for purpose of its imposition. No question of discrimination under article 14 can arise in such situation. We fully share view of High Court that there was nothing to prevent legislature from giving benefit of reduced rate to registered firm for purpose of tax but withhold same when it committed default and became liable to imposition of penalty. " In view of provisions particularly made for imposition of penalty upon registered firm, it is irresistible to conclude, in terms of language of s. 271(2) that while quantifying penalty, assessed tax is not to be taken as one payable by assessee as registered firm but as if it is unregistered firm. Any other meaning given to it shall cause serious violence to non-obstante clause and words " notwithstanding anything contained in other provisions of this Act shall lose its purpose." CIT v. Maskara Tea Estate [1981] 130 ITR 955 (Gauhati), has proceeded on basis that to attract non-obstante clause, main sub-section must be applicable. liability of person must be determined and in doing so, one has to look at preceding sub-s. (1). On due scrutiny of s. 271(1)(a) as well as clause (i), if person is liable and if it happens to be registered firm, sub-s. (2) is attracted. conditions precedent for applicability of sub-s. (2) are two clauses of defaults referred to in s. 271(1)(a) and (i) as sub-s. (2) is applicable only to " person liable to penalty " and also that s. 271(1)(a)(i) does not exclude registered firms but incorporates all persons. This view, I am afraid, cannot be accepted. Legal fiction which is created by sub-s. (2) of s. 271 is independent of tax liability. Once it is found that there is default so as to attract penal provisions under s. 271(1)(a), sub-s. (2) of s. 271 shall come into play. If assessee is registered firm, legal fiction created by it shall not permit to give to assessee benefits of its being registered firm. assessee must answer requirements as if it is not registered firm. Its assessed tax for purpose of imposition of penalty shall be that which shall be determined on footing that it is not registered firm. There is no abuse of non-obstante clause involved if it is applied in this manner. Person liable to penalty is one who has committed default as envisaged under s. 271(1). If it is registered firm, it shall be in same equation with unregistered firms as person liable to penalty. Section 271(1)(a)(i) has to be read along with s. 271(2) and not separately as if s. 271(1)(a)(i) has got different purpose. In my view, s. 271 shall operate in case of registered firm at time of quantification of penalty under s. 271(1)(i)(b) and tax determined to be payable by it as unregistered firm shall be tax for computation of penalty. For view that I have taken, I am unable to agree with answer provided by CIT v. Maskara Tea Estate [1981] 130 ITR 955 (Gauhati) and cases taking views similar to one taken in that case. In my opinion, question under reference has to be answered in affirmative. amount of penalty calculated on basis of tax on unregistered firm is valid. To conclude, I hold that on facts and in circumstances of case penalty under s. 271 (1) is leviable upon assessee and amount of penalty of Rs. 8,680 calculated on basis of tax as on unregistered firm has been validly levied on assessee for assessment year 1966-67. It is thus obvious that all questions referred to this court have to be answered against assessee. question as to whether penalty under s. 271(1)(a) could be imposed even after charging interest under s. 139 for delayed submission of return in all its aspects including broad question as reframed, whether in facts and in circumstances of case, penalty under s. 271(1) is leviable or not is answered in affirmative. second question whether, on facts and in circumstances of this case, ITO had forfeited his right to impose penalty under s. 271(1)(a) by not completing assessment under s. 144 is answered in negative. third question whether, on facts of case, penalty of Rs. 8,680 calculated on basis of tax as on unregistered firm could be levied in this case when no tax was payable by it as registered firm is answered in affirmative. All questions are thus answered against assessee and in favour of Revenue. copy of this judgment under seal of High Court and signature of Registrar shall be sent to Income-tax Tribunal, Patna Bench, as required under s. 260(1) of I.T. Act. parties shall bear their own costs. NAZIR AHMAD J.-I have gone through order of P. S. Mishra J. and I am to say that question No. 1, as referred by Income-tax Appellate Tribunal, B Bench, Patna, in R. A. Nos. 51 and 52 (Pat) of 1974-75 is as follows: " (1) Whether penalty under section 271 (1)(a) could be imposed even after charging interest under section 139 for delayed submission of return?" I also agree with him that Mr. K. N. Jain, learned advocate appearing for assessee, at first suggested that question No. 1, as mentioned above, requires reframing. He wanted reframing of question as follows: " Whether, on facts and in circumstances of case, penalty under section 27 l(1)(a) is leviable having in view provisions of section 139 of Income-tax Act, 1961? " P. S. Mishra J. has pointed out contention raised by Mr. Jain. His contention was that s. 271(1)(a) of I.T. Act, 1961 (hereinafter referred to as said " Act "), speaks of default in furnishing return of total income under sub-s. (1) of s. 139 or by notice given under sub-s. (2) of s. 139 and failure to furnish it within time allowed and in manner required by sub-s. (1) of s. 139 or by such notice, as case may be. According to Mr. Jain, under s. 139(1), definite period has been fixed for filing return and if no return is filed on or before due date, there is default, and so return filed under s. 139(2) or under s. 139(4) cannot be said to be return filed under s. 139(1) of said Act and, thus, even if return is filed under s. 139(4), default in filing return under s. 139(1) is not removed and so, according to Mr. Jain, in fact beginning and end of default in filing return under s. 139(1) coincide and either return under s. 139(1) is filed or not filed at all and that being position, according to Mr. Jain, it is not possible to quantify amount of penalty on basis of amount of tax payable by defaulting assessee for every month during which default continued. In other words, once there is default in filing return under s. 139(1) of said Act, there is no continuity attached to it and if there is any, it is ad infinitum and that in absence of terminus provided under s. 271 and/or any other provision of said Act imposition of penalty is neither practicable nor possible. entire argument of Mr. Jain has been quoted by P. S. Mishra J. in paragraph 7 of his judgment. question which Mr. Jain actually wanted to reframe is question whether, on facts and in circumstances of case, penalty under s. 271 (1)(a) of said Act is leviable having in view provision of s. 139 of said Act, and for this purpose he wanted that question No. 1 referred by Tribunal for decision of this court be redrafted and so, subsequently, he suggested as follows; " Whether, on facts and in circumstances of case, penalty under section 271(1)(a) is leviable?" Such wider question was never raised before Tribunal nor reference on such wider question was asked for. question which Mr. K. N. Jain had originally raised was question which was different from question referred by Tribunal. It is evident from order of Appellate Tribunal that first contention on behalf of assessee was that ITO having charged interest under s. 139 cannot impose penalty under s. 271(1)(a) of said Act. Tribunal held that this contention was not acceptable, because it is intention of Legislature to charge both interest and penalty for default of delayed return. Thus it is evident that no argument was advanced on point that ITO had no jurisdiction to impose penalty as no terminus has been provided under s. 271 and/or imposition of penalty is neither practicable nor possible. In my opinion, this cannot be different aspect of question, because question now raised goes to root of jurisdiction of ITO to impose penalty. Challenging jurisdiction of ITO is not different aspect of same question but different and new question altogether. Moreover, P. S. Mishra J. has also clearly pointed out towards end of paragraph 7 that Mr. Jain indicated that he was not pressing his contention and thus Mr. Jain ultimately withdrew his claim for reframing question No. 1 as suggested by Tribunal. This will be another point to be considered whether when assessee does not raise issue, can this court suo motu raise question and decide same. Allahabad High Court in case of Amrit Banaspati Co. Ltd. v. CIT [1964]54 ITR 229 has pointed out that Tribunal in that case referred following question (p. 230): " Whether, on facts and in circumstances and on true interpretation of provisions of clause (ii) of sub-section (2) of section 10 of Income-tax Act, assessee was entitled to deduction of expenses of capital nature included in cost of repairs to premises of which he was tenant?" In this decision, it was suggested that question referred by Tribunal should have been whether carrying out three items of works amounted to repairing godown and not question formulated by Tribunal. It was held under such circumstances that court in exercise of its power of re- drafting question cannot substitute question which was not sought to be referred in application made under s. 66(1); it cannot answer question which was not mentioned in application under s. 66(1) itself and that court has no jurisdiction to amend question referred by Tribunal by substituting in its place different question. P. S. Mishra J. has relied on case of CIT v. Scindia Steam Navigation Co. Ltd. [1961] 42 ITR 589, decision of Supreme Court. In this decision, it was held that jurisdiction of High Court in reference under s. 66 of I.T. Act is special one, different from its ordinary jurisdiction as civil court and High Court hearing reference under that section does not exercise any appellate or revisional or supervisory jurisdiction over Tribunal and that it acts purely in advisory capacity, on reference which properly comes before it under s. 66(1) and (2) and that it gives Tribunal advice, but ultimately it is for Tribunal to give effect to that advice. It has also been held in this decision that it is of essence of such jurisdiction that court can decide only questions which are referred to it and not any other questions: Tribunal should have had occasion to consider question so that it may decide whether it should refer it for decision of court. It has also been held in this decision that power of court to issue direction to Tribunal under s. 66(2) of I.T. Act is in nature of mandamus and it is well settled that no mandamus will be issued unless applicant had made distinct demand on appropriate authorities for very reliefs which he seeks to enforce by mandamus and that had been refused. It has also been held that power of court to direct reference under s. 66(2) is subject to two limitations, question must be one which Tribunal was bound to refer under s. 66(1) and applicant must have required Tribunal to refer it. It has also been pointed out that form prescribed under rule 22A of I.T. Rules for application under s. 66(1) shows that applicant must set out questions which he desires Tribunal to refer and that, further, those questions must arise out of order of Tribunal, and that under s. 66(2), court cannot direct Tribunal to refer question unless it is one which arises out of order of Tribunal and was specified by applicant in his application under s. 66(1). At page 602 of this decision observation has been quoted with approval of Patna High Court in case of Maharaj Kumar Kamal Singh v, CIT [1954] 26 ITR 79, to effect that provisions of ss. 66(1) and 66(2) do not confer upon High Court general jurisdiction to correct or to decide question of law that may possibly arise out of incometax assessment and that section, on contrary, confers special and limited jurisdiction upon High Court to decide any specific question of law which has been raised between assessee and Department before Income-tax Tribunal and upon which question parties are at issue. At page 603 of this decision, observation has been quoted with approval from case of Chainrup Sampatram v. CIT [1951] 20 ITR 484 (Cal), that Indian I.T. Act has not charged High Court with duty of setting right in all respects all assessments that might come to its notice; its jurisdiction is not either appellate or revisional; nor has it general power of superintendence under s. 66 and that its sole duty is to serve as appointed machinery for resolving any conflict which may arise between assessee or Commissioner on one hand and Tribunal on other regarding some specific question or questions of law. This clearly goes to show that unless dispute is raised by assessee or Commissioner, court cannot redraft question to decide matter which is no longer in issue between parties. It has also been held at page 605 of this decision, while quoting observation of Chagla C.J., that if Tribunal does not refer question of law under s. 66(1) which arises out of order, then only jurisdiction of court is to require Tribunal to refer same under s. 66(2) and that it is true that court has jurisdiction to resettle questions of law so as to bring out real issue between parties but it is not open to court to raise new questions which have not been referred to it by Tribunal. It has been observed at page 610 of this decision that if it is held that court can allow new question to be raised on reference, that would in effect give applicant right which is denied to him under s. 66(1) and (2), and enlarge jurisdiction of court so as to assimilate it to that of ordinary civil court of appeal. It has also been held in this decision that correct view to take is that right of litigant to ask for reference, power of Tribunal to make one, and jurisdiction of court to decide it are all co-extensive and, therefore, question of law which applicant cannot require Tribunal to refer and one which Tribunal is not competent to refer to court, cannot be entertained by court under s. 66(5). It was observed at page 612 that as question on which parties were at issue, which was referred to court under s. 66(1) and decided by it under s. 66(5) is whether sum of Rs. 9,26,532 is liable to be included in taxable income of respondents, ground on which respondents contested their liability before High Court was one which was within scope of question, and High Court rightly entertained it. Thus, from this decision, it is evident that unless question is at issue between parties, it cannot be redrafted by this court. When Mr. K. N. Jain withdrew his claim for re- drafting question, court has no right to re-draft question, specially when effect of re-drafting will be that assessee claims that ITO had no jurisdiction to impose penalty in view of provisions of s.271 (1)(a) read with s. 139 of I.T. Act, 1961. This clearly goes to show that it is not different aspect of same question but two questions are independent of each other. In case of Iranee v. CIT [1966] 60 ITR 437 (SC), it has been held that though in assessee's application under s. 66(2) of I.T. Act, one of questions raised related to earlier losses ascertained in 1946 and facts relating thereto were narrated, High Court directed Tribunal to refer only question whether Tribunal erred in law or misdirected itself in rejecting assessee's claim to set off alleged losses of 1941 of Hong Kong business against income of assessment year 1947-48. On reference, High Court held that question as framed was confined to losses of year 1941, but in deference to counsel's argument considered contention that loss suffered by assessee during period 1941 to 1945 was ascertained only in 1946, and that it must be deemed to have been incurred only in that year. Under these circumstances, Supreme Court held that assessee was not entitled to raise question relating to ascertainment of loss only in 1946, as it was question entirely different from that propounded for decision of High Court. In case of Kumar and Brothers (P.) Ltd. v. CIT [1967] 63 ITR 67 (SC), appellant applied to Tribunal for reference, inter alia, of question whether having regard to decision of Tribunal in relevant assessment proceedings, order imposing penalty under s. 28(1)(c) could be made. Tribunal refused to state case and appellant applied to High Court under s. 66(2) for order directing Tribunal to state case, and argued, that even if facts found by Tribunal be correct, s. 28(1)(c) was not attracted, regard being had to proper meaning of word "income " in that section. In those circumstances, their Lordships of Supreme Court held that question on which reference was sought was limited question which did not arise out of Tribunal's order and that question sought to be raised before High Court was new question and was not aspect of any question raised before Tribunal and High Court was right in rejecting application under s. 66(2), and it was also observed that it is only question that has been raised before and decided by Tribunal that can be held to arise out of its order and that in respect of question which was not raised or argued before Tribunal, or decided by it, reference under s. 66(2) cannot be asked for. In case of Seth Pushalal Mansinghka (P.) Ltd. v. CIT [1967] 66 ITR 159, it was held by their Lordships of Supreme Court at page 168 that when question of law is neither raised before Tribunal nor considered by it, it will not be question arising out of order of Tribunal and High Court will be acting beyond its jurisdiction in dealing with any such question. It has been held in case of CIT v. Smt. Anusuya Devi [1968] 68 ITR 750 by their Lordships of Supreme Court at pages 756 and 757 that it is well settled that High Court may decline to answer question of fact or question of law which has no bearing on dispute between parties or though referred by Tribunal does not arise out of its order. It has been observed at page 757 that power to reframe question may be exercised to clarify some obscurity in question referred or to pinpoint real issue between taxpayer and Department or for similar other reason; it cannot be exercised for reopening enquiry on questions of fact or law which are closed by order of Tribunal. It has been held in case of CIT v. Krishna and Sons [1968] 70 ITR 733 (SC) by their Lordships of Supreme Court that jurisdiction of Supreme Court arising in appeal over judgment of High Court on reference under I.T. Act is also advisory, and Supreme Court can only record its opinion on questions which are referred; not on questions which could have been, but have not been referred. It has been held by their Lordships of Supreme Court at page 196 in case of CIT v. Devi Prasad Vishwanath Prasad [1969] 72 ITR 194 (SC) that it was not open to High Court to direct Tribunal to state case on question which was never raised before or decided by Tribunal at hearing of appeal. It has been held in case of Lakshmiratan Cotton Mills Co. Ltd. v. CIT [1969] 73 ITR 634 by their Lordships of Supreme Court that High Court had no power to call for statement of case on questions which were incorporated neither in application under s. 66(1) nor in application under s. 66(2) of said Act and power under s. 66(4) might be exercised to call for supplementary statement only when court is satisfied that statements of case referred under s. 66(1) and (2) were not sufficient to enable it to determine question raised by that statement and that s. 66(4) did not confer power to raise any additional question and to call for statement of case on question not referred by Tribunal. In case of CIT v. Indra and Co. [1971] 79 ITR 702, it has been pointed out at page 707 by Rajasthan High Court that argument had been addressed that if interest has been charged for any period during which default continued, penalty cannot be imposed. question referred by Tribunal was, "Whether Tribunal rightly held that orders of penalties in question under section 271(1)(a) of Income-tax Act, 1961, were tenable in law? " In those circumstances, it was held that this aspect of matter had not been referred to High Court and so they refused to make any pronouncement relating to it. In case of CIT v. Kotrika Venkataswamy and Sons [1971] 79 ITR 499 (SC) question referred was: " Whether, on facts and in circumstances of case, and on true appreciation of the, material on record, was Appellate Tribunal justified in coming to conclusion that department did not prove concealment of income in respect of following additions, viz., inflation of purchase transaction in name of K. Venkataseshaiah Chetty, Rs. 21,500, (2) speculation losses in names of seven persons, Rs. 26,789? " It was contended before their Lordships of Supreme Court that question which was submitted by Tribunal for reference to High Court was itself wide enough to include question about jurisdiction of Tribunal to, reach conclusion different from that which it had reached in assessment proceeding. Supreme Court held that form of question submitted clearly shows that what Tribunal was asked to do was to submit case to High Court on question whether Tribunal was justified in coming to conclusion on facts and in circumstances of case that no concealment was proved by department and that question cannot include enquiry whether Tribunal had jurisdiction to reach question different from conclusion it had reached in proceeding for assessment. In case of Karnani Properties Ltd. v. CIT [1971] 82 ITR 547 (SC), question referred was: " Whether, on facts and in circumstances of case, Tribunal was justified in holding that services rendered to tenants by supplying electrical energy, hot and cold water and maintenance of lifts and other amenities, constituted business activity of assessee and as such income arising therefrom was assessable under section 10 of Indian Income-tax Act, 1922?" It was held by Supreme Court that in absence of question whether findings were vitiated for any reason being before High Court, High Court has no jurisdiction to go behind or question statement of facts made by Tribunal. In case of Agha Abdul Jabbar Khan v. CIT [1971] 82 ITR 872 (SC), question referred by Tribunal was " Whether income from property transferred to assessee's wife for consideration of Rupees one lakh could be assessed in his hands under section 16(3) of Indian Income-tax Act, 1922? " High Court, instead of answering question, formulated two other questions, viz, whether there could be in law oral transfer of property in lieu of Rupees one lakh due as dower debt and if so whether income from property was liable to be included in assessable income of assessee under s. 16(3). In these circumstances, Supreme Court held that High Court had no jurisdiction to raise new questions of law i questions raised by it did not flow from question referred by Tribunal and that if High Court thought that question referred to it did not bring out real point in issue, it was open to it to call for fresh statement of case and direct Tribunal to submit for its opinion, real question arising for decision and that High Court was not entitled to deal with reference as if it was dealing with appeal before it. In case of CIT v. S. P. Jain [1973] 87 ITR 370, their Lordships of Supreme Court at page 395, have pointed out that answer to question No. 1 had not been pressed and, hence, no answer to it was given. In case of Madras Machine Tools Manufacturers Ltd. v. CIT [1975] 98 ITR 119 (Mad), it has been pointed out at page 125, that assessee at whose instance reference on third question has been made does not want to prosecute same and so it is unnecessary to consider that question and express any opinion thereon and that when party who has caused reference does not want to press same, court should refrain from answering said question. It has been held in case of Jagan Nath Pyare Lal v. CIT [1973] 92 ITR 207 by Punjab and Haryana High Court that where question of law is neither raised before nor considered by Tribunal, it will not be question arising out of its order notwithstanding that it arises on findings given by it. In case before their Lordships it was held that question whether registration could be refused to partnership business on ground that application for registration had not been signed by one of partners was neither raised before nor considered by Tribunal and High Court could not go into question on reference. It has been held in case of Addl. CIT v. Dongarsidas Biharilal [1979] 116 ITR 897 (Pat) that it is accepted principle of law that where question referred for its opinion does not cover real controversy in issue, High Court can reframe question and decide real controversy Similar view has been taken in case of CIT v. Chennabasappa [1959] 35 ITR 261 (AP). From aforesaid decisions, it is evident that when Mr. R.N. Jain did not press question which he argued and when he specifically mentioned that he did not want reframing of question No. 1 referred by Tribunal and that question referred by Tribunal may be answered, then it cannot be said that there is any controversy between assessee and department in connection with matter for which redrafting of question No. 1 was suggested. Moreover, before Tribunal only dispute was that no penalty can be imposed when interest has been charged. Before High Court, Mr. K.N. Jain for assessee tried to raise question that ITO had no jurisdiction to impose penalty in view of provisions of s. 271(1)(a) read with s. 139(1) which was in effect different and new question. Even if question is redrafted to effect whether penalty can be imposed under s. 271(1)(a), then it will be wider question than what was raised before Tribunal and such question cannot be redrafted as such question was not raised before Tribunal and, in such case, it cannot be said that it is different aspect of same question. other point which needs clarification is that default under s. 271(1)(a)/139(1) is complete when return is not filed on due date and so law on date return is due will be applicable and not present law. It has been held in case of CIT v. Muthukumaraswamy Mudaliar [1975] 98 ITR 540 by Madras High Court that where infringement is said to be failure to furnish return in time, offence is complete when return is not filed on due date and in such cases offence having taken place on date fixed for furnishing return, law as on that date has to govern levy of penalty. It has been held in case of Indu Barua v. CWT [1980] 125 ITR 436 by Gauhati High Court that quantum of penalty must be determined on basis of law prevailing on day when default was committed and that failure to file returns in time is not continuing offence and infringement of law is complete on date when assessee fails to file return under s. 14(1) of W.T. Act, 1957, and quantum of penalty for default must be determined with relation to law prevailing on day when default was committed and law applicable on that date in regard to penalty will be applicable and not law amended from time to time. It has been held in case of CWT v. Mahajan [1980] 126 ITR 706 by Punjab and Haryana High Court that late filing of return as contemplated by s. 18(1)(i) of W.T. Act, 1957, is not recurring offence and offence is complete on date when return is not filed as prescribed by law and offence is committed when return is not filed on due date and penalty is to be computed in accordance with provisions of law as it prevailed at time of commission of offence. It has been held in case of CWT v. Ram Narain Agrawal [1977] 106 ITR 965 by Allahabad High Court that law operative on date when infringement takes place is law applicable unless it is made applicable ex post facto and that default in cases of non-filing of returns takes place after expiry of time or notice. It has been held in case of CWT v. Chunni Lal Anand [1979] 116 ITR 355 by Allahabad High Court that for assessment year 1968-69, wealth-tax return was due on or before June 30, 1968, and, therefore, for purpose of levy of penalty for delay in submission of return, law as it stood on that date would be applicable and not law as on date of beginning of assessment year, namely, April 1, 1968, or date on which return was actually filed. It has been held in case of Addl. CWT v. Manjuladevi Muchhal [1979] 119 ITR 43 by Madhya Pradesh High Court that assessee committed default in filing of returns on dates fixed for filing returns, i.e., 30th June, 1961, 30th June, 1962, and 30th June, 1963, and law for purpose of penalty that would be applicable would be law in force on those dates and not law which had been brought into force on April 1, 1969. aforesaid views expressed by different High Courts have been finally set at rest by their Lordships of Supreme Court in case of CWT v. Suresh Seth [1981] 129 ITR 328, where their Lordships of Supreme Court have held that where default complained of is one falling under s. 18(1)(a) of W.T. Act, 1957 (e.g., failure to file return of wealth before due date without reasonable cause), penalty has to be computed in accordance with law in force on last day oil which return in question had to be filed and neither amendment made in 1964 nor one made in 1969, to clause (i) of s. 18(1) has retrospective effect. It has also been held that non-performance of any of acts mentioned in s. 18(1)(a) gives rise to single default and to single penalty, measure of which, however, is geared up to time-lag between last day on which return has to be filed and date on which it is filed; and that default, if any, committed, is committed on last date allowed to file return and default cannot be one committed every month thereafter and that words " for every month during which default continued " indicate only multiplier to be adopted in determining quantum of penalty and do not have effect of making default in question continuing one, nor do they make amended provisions modifying penalty applicable to earlier defaults in absence of necessary provisions in amending Acts. It has also been held in this decision that distinctive nature of continuing wrong is that law that is violated makes wrongdoer continuously liable for penalty and wrong or default which is complete but whose effect may continue to be felt even after its completion is, however, not continuing wrong or default. P. S. Mishra J. has already quoted relevant provisions of ss. 139 and 271 of said Act as they were in force in assessment years 1965-66 and 1966-67, which are assessment years involved in present cases and, hence, repetition is not necessary. As regards question No. 1, as referred by Tribunal, learned advocate for assessee, Mr. K. N. Jain, did not press it. question which has been referred is to effect whether penalty under s. 271(1)(a) of I.T. Act, 1961, could be imposed even after charging interest under section 139 for delayed submission of return. In this connection, it has been held in case of Express Newspapers (P.) Ltd. v. ITO [1973] 88 ITR 255 by Madras High Court that when statute provides time-limit for filing return, it can also provide penalty for non-submission of return in time and in addition, statute can also provide as compensatory measure that interest should also be paid on amount of tax for period of delay and, therefore, provision for payment of penalty as well as interest for delayed submission of return cannot be said to offend any constitutional provision. It has been held in case of Venkatakrishnaiah and Co. v. CIT [1974] 93 ITR 297 by Andhra Pradesh High Court that ITO was competent to levy penalty under s. 271(1)(a) although he had levied interest under clause (iii) of proviso to s. 139(1) as imposts are different and distinct and they have been provided to meet different situations and contingencies and that mere fact that under Act assessee can file return before assessment is made or revised return at any time before assessment is made does not absolve assessee from levy of penalty under clause (a) of sub-s. (1) to s. 271. It has been held in case of Narandas Paramanand Das v. ITO [1975] 98 ITR 453 by Calcutta High Court that legislature had made distinction between interest which is payable under s. 139, proviso (iii) of said Act, where return is not filed within statutory time or within time as extended by ITO and penalty which is leviable under s. 271 only if income-tax authority is satisfied that without reasonable cause assessee failed to file return of total income within time prescribed and provision for calculation of interest is not of nature of penal interest and that penalty proceeding is quite different proceeding and levy of interest will not prohibit levy of penalty and that penalty can be levied even if return is filed before assessment is made but after prescribed time. It has been held in case of Navalgundkar and Co. v. CIT [1975] 98 ITR 675 by Karnataka High Court that there is nothing in I.T. Act, 1961, to indicate that s. 139 of Act prescribing interest to be charged, and s. 271(1)(a) prescribing penalty to be levied for delay in submission of return are alternative and not cumulative and, therefore, it is competent on part of ITO to levy penalty under s. 271(1)(a) of said Act even where interest has been charged, under s. 139 of said Act. It has been held in case of Kerala Tile and Clay Works v. CIT [1976] 104 ITR 597 by Kerala High Court that for failure to file return in time as required by s. 139(1) of said Act, penalty can be imposed as well as penal interest and that what is levied under s. 271(1)(a) is penalty for default and attempted evasion of tax and it is punishment for failure of assessee to comply with statutory duty imposed by s. 139(1), and it is deterrent in character and liability to pay interest arises under s. 139 and, no doubt, two consequences arise out of same default and one is compensatory and other punitive and each is complementary to other and both are provided for by Act. It is in view of these aforesaid decisions that Mr. K. N. Jain, learned advocate for assessee, did not press question No. 1 as referred by Tribunal and so it is to be answered against assessee and in favour of Revenue. .As regards finding of P. S. Mishra J. that period of default under s. 271(1)(a) reckoned from due date of filing return has to be taken to have come to end with filing of return of income, if it is filed before best judgment assessment under s. 144 and within period prescribed under s. 139(4) and in case of no return of income filed at all with assessment of income as prescribed under s. 144 of said Act. I agree with this finding. There are various decisions to support this view. It has been held in case of Govindarajulu Iyer v. CIT [1948] 16 ITR 391 by Madras High Court that once assessment proceedings have commenced with general notice under s. 22(1) of Indian I.T. Act, 1-922, they can only come to end by either order of assessment or order declaring that no assessment can be made and where there is no such order and eventually proceedings are taken under s. 34 of aforesaid Act, such proceedings must be deemed to relate to proceedings which commenced with public notice under s. 22(1). It has been held in case of CIT v. Indra and Co. [1971] 79 ITR 702 at page 705 by Rajasthan High Court that default is in not furnishing return and as soon as return is furnished, there is end of default. It has also been held in this decision that it has been expressly laid down in s. 139(7) that no return under sub-s. (1) need be furnished by any person for any previous year if he has already furnished return of income for such year in accordance with provisions of sub-s. (2) and that in all cases mentioned in s. 271(1)(a) of said Act, default continues only till time when return has been furnished or if no return has been furnished at all, it continues till assessment is completed, but, if return has been furnished, default ceases whether such return is furnished under sub-s. (1) of s. 139 or by notice given under sub-s. (2) of s. 139 or under s. 148 and that it is immaterial for purpose of cessation of default that return has been filed in, obedience to any particular provision of law. In case of Chunnilal and Bros. v. CIT [1979] 119 ITR 199, Madhya Pradesh High Court has approved finding in CIT v. Indra and Co. [1971] 79 ITR 702, where it has been held that in all cases mentioned in s. 271(1)(a), default continues only till time when return has been furnished or if no return has been furnished at all, it continues till assessment is completed and that if return has been furnished, default ceases where such return is furnished under sub-s. (1) of s. 139 or by notice given under sub-s. (2) of s. 139 or under s. 148 and that it is immaterial for purpose of cessation of default that return has been filed in obedience to any particular provision of law. It has been held in case of Sikand v. CIT [1980] 126 ITR 202 by Delhi High Court that default is for not filing return in time and period of default starts moment statutory period within which return has to be filed is over, and continues till filing of return or assessment, whichever is earlier, and that issue of notice under s. 139(2) cannot per se have effect of wiping out earlier period of default and that this can be done only by expressly condoning delay. It has been held in case of Laxmi and Co. v. CIT [1981] 128 ITR 259 by Allahabad High Court that default of not filing return under s. 139(1) continues till time when return has been furnished or if no return has been furnished it continues till assessment is made and that assessee is liable to pay penalty under this provision for not having filed return voluntarily under s. 139(1) even if he files return subsequently in pursuance of notice under s. 139(2). In decision in case of Addl. CIT v. Dongarsidas Biharilal [1979] 116 ITR 897 (Pat), view has been taken by S. P. Sinha J. (as he then was), that there is no provision under I.T. Act for carrying over default in filing return beyond limits of assessment year and that like assessment of income to income-tax which must remain confined to assessment year, assessment of penalty must also remain confined to assessment year, and that default cannot be carried over beyond that assessment year. It has also been held in decision that in terms of s. 271(1)(a), period of default starting on day following due date for compliance with terms of s. 139(1) or s. 139(2) of said Act remains circumscribed within 12 months of relevant assessment year and that similar would be position where steps have been taken to tax escaped income under s. 148 of said Act, and there also period of default in filing required return of income will remain circumscribed within 12 months of year in which steps for reassessment of escaped income have been taken. entire finding of S. P. Sinha J. (as he then was) appears to be not correct, as provision under s. 271(1)(a) read with cl. (i) in cases referred to in cl. (a) in addition to amount of tax, if any, payable by assessee sum equal to 2 per cent. of tax for every month during which default continues but not exceeding in aggregate 50 per cent. of tax itself shows that default can continue but only limit is that it cannot exceed 50 per cent. of tax and this shows that default continues till filing of return or assessment and so view taken in decision mentioned above is not correct view in view of aforesaid decisions and, in this connection, I agree with findings of P. S. Mishra J. and observations of S.P. Sinha J. (as he then was), in case of Addl. CIT v. Dongarsidas Biharilal [1979] 116 ITR 897 aforesaid has to be reversed. I also agree with P.S. Misra J. as regards findings that view taken in case of Addl. CIT v. Bihar Textiles [1975] 100 ITR 253 of Patna High Court is not correct view. In this connection, I am supported by various decisions. It has been held in case of CIT v. Indra and Co. [1971] 79 ITR 702 by Rajasthan High Court that assessee is liable to penalty for not submitting his return as required under s. 139(1) of said Act, even though he subsequently files return in pursuance of notice under s. 139(2) of said Act and assessment is made on basis of that return. It has been held in case of CIT v. Hindustan Industrial Corporation [1972] 86 ITR 657 by Delhi High Court that plain language of s. 139(2) of said Act cannot be strained to hold either that assessee is absolved of his statutory obligation to file return of his income voluntarily under s. 139(1) and that default committed in not filing return voluntarily under s. 139(1) cannot be taken note of for initiating proceedings for imposition of penalty if notice under s. 139(2) is issued, or that period of default shall cease from date when notice under s. 139(2) is served on assessee. It has been held in case of Addl. CIT v. Santosh Industries [1974] 93 ITR 563 by Gujarat High Court disagreeing with Tribunal and rejecting contention of assessee, that second clause of s. 271 (1)(a) of said Act applies where person failed to furnish return of income within time allowed strictly under sub-s. (1) or sub-s. (2) of s. 139, and filing of return after expiration of such time but before expiration of four years from end of assessment year under s. 139(4) did not save him from penalty for default contemplated under second clause to s. 271(1)(a) of said Act and words " within time allowed by sub-s. (1) of s. 139 " in second clause of s. 271(1)(a), according to their plain natural meaning, must be taken to refer to time specified in sub-s. (1) of s. 139 or extended by ITO under proviso to that sub-section and not so as to include time within which return of income may be filed under sub-s. (4) of s. 139. It has been held in case of Mullapudi Venkatarayudu v. Union of India [1975] 99 ITR 448 by Andhra Pradesh High Court that argument for petitioner that, under s. 271(1)(i) of said Act, penalty can be levied for period during which default continued, and that as no return was filed by assessee under s. 139(1), default continued indefinitely and no definite period could have been arrived at by ITO to determine quantum of penalty, was without any merit. It was also held in this decision that continuance of default would be up to date on which return was filed either under s. 139(2) or s. 139(4) of said Act, and that petitioner had filed his return under s. 139(2). It has also been held in this decision that because ITO issues notice under s. 139(2) after termination of period prescribed by s. 139(1), ITO cannot be deemed to have condoned non-compliance to furnish return under s. 139(1) of said Act. It has been held in case of CIT v. Gangaram Chapolia [1976] 103 ITR 613 by Full Bench of Orissa High Court that even if return of assessee had been filed in manner prescribed, as it was not filed within time allowed under s. 139(1) of said Act, and as such one of two conditions prescribed in s. 271(1)(a) of said Act had not been fulfilled, assessee would be liable to penalty. It has also been held in this decision that it cannot be contended that as assessee filed return within time allowed under s. 139(4) of said Act, he should be deemed to have filed return within time allowed under s. 139(1) of said Act and, consequently, no penalty under s. 271(1)(a) was imposable and that s. 139(4) was in nature of proviso to s. 139(1) for all purposes under said Act, and that concession given under s. 139(4) is restricted to assessment and cannot be availed of by assessee for all purposes under Act including penalty proceeding and that if assessee's contention was to be accepted, time-limit prescribed in s. 139(1) would be otiose and wholly unnecessary except for purposes of charging interest. It has been held in case of Metal India Products v. CIT [1978] 113 ITR 830 by Full Bench of Allahabad High Court that where assessee did not file his return within time prescribed by s. 139(1) of said Act and where no notice was issued by ITO to assessee under s. 139(2) of said Act, even if assessee filed his return under s. 139(4), that is, within four years from end of assessment year and before assessment Order was passed, assessee is liable to pay penalty under s. 271 (1)(a) of said Act for not having filed return within time prescribed in s. 139(1) of said Act and time given under s. 139(2). It has also been held in this decision that for purpose of penalty, filing of return within time prescribed by sub-s. (4) of s. 139 cannot be treated as return filed within time prescribed by sub-s. (1) and that emphasis of s. 271(1)(a) is for checking evasion of time prescribed by sub-s. (1) or sub-s. (2) of s. 139. It has also been held in this decision that if time prescribed by sub-s. (1) or (2) passes, default takes place attracting liability for penalty. It has been held in case of Atwal and Co. v. CIT [1979] 117 ITR 171 by Calcutta High Court that penalty can be imposed on assessee under s. 271(1)(a) of said Act for delay in furnishing returns, even though returns were filed before completion of assessment and that once default has been committed in complying with s. 139(1), fact that notice under s. 139(2) has been served subsequently on assessee would not make any difference to date of default and that default would start from date on which return of income became due under s. 139(1) of said Act. It has been held in case of Chunnilal and Bros. v. CIT [1979] 119 ITR 199 by Madhya Pradesh High Court that assessee's default in not furnishing his return within time allowed and in manner specified in s. 139(1) of said Act exposes him to penalty under s. 271(l)(a) and imposition of penalty would not be invalid merely because assessee subsequently filed return in response to notice under s. 139(2) or s. 148. It has also been held in this decision that default under s. 139(1) ceases only on filing of return in response to notice under s. 139(2) or s. 148 or in compliance with s. 139(4) and that in absence of express order of condonation of default, mere issue of notice under s. 139(2) to person who has not filed return under s. 139(1) would not amount to condonation of default under s. 139(1) and that notice under 139(2) neither arrests nor wipes out default under s. 139(1). It has also been held in case of CIT v. Save [1979] 119 ITR 266 by Bombay High Court that where assessee does not file return as provided under s. 139(1) of said Act and ITO issues notice to assessee under s. 139(2), whereafter assessee files return, assessee will not be absolved from payment of penalty for not filing return as provided in s. 139(1) and penalty will be payable from date fixed under s. 139(1) for filing return or date to which time for filing return might have been extended by ITO up to date on which return is finally filed by assessee. It has been held in case of Sikand v. CIT [1980] 126 ITR 202 by Delhi High Court that sub-ss. (1) and (2) of s. 139 of said Act deal with two different situations and first imposes obligation to file return suo motu and second to furnish return in compliance with notice under s. 139(2), and that it is true that in terms of s. 139(7), only one return is required to be filed, but that cannot have effect of wiping out earlier obligation to file return suo motu under s. 139(1) of said Act. It has been held in case of Laxmi and Co. v. CIT [1981] 128 ITR 269 by Allahabad High Court that failure to furnish return voluntarily under s. 139(1) of said Act is distinct and separate from failure to file return in pursuance of notice under s. 139(2) and legal consequences of omission or failure to file return under s. 139(1) as well as that of not complying with notice under s. 139(2) are dealt with in s. 271 and that analysis of s. 271(1)(a) of said Act shows that penalty becomes imposable moment default takes place and that assessee is liable to pay penalty under this provision for not having filed return voluntarily under s. 139(1) even if he files return subsequently in pursuance of notice under s. 139(2) of said Act. It has been held in case of CIT v. Dehati Co-operative Marketingcum- Processing Society [1981] 130 ITR 504 by Punjab and Haryana High Court that it cannot be said that once notice requiring assessee to furnish return under s. 139(2) or s. 148 of said Act, is issued, penalty cannot be imposed for failure to furnish return under s. 139(1) of said Act. In view of aforesaid decisions it has to be held that decision in case of Addl. CIT v. Bihar Textiles [1975] 100 ITR 253 of Patna High Court to effect that once notice under sub-s. (2) of s. 139 of said Act has been issued to assessee during relevant assessment year, there cannot be any penalty under 271(1) for failure to furnish return as required by sub-s. (1) of s. 139 and that where return is filed beyond time given in notice under s. 139(2) of said Act, penalty will have to be calculated only from expiry of time fixed for filing return in notice under s. 139(2) of said Act is not correct decision. In view of my findings and discussions above, it is thus evident that assessee is liable to penalty for not submitting his return as required under sub- s. (1) of s. 139 of said Act, even though he subsequently files return in pursuance of notice under s. 139(2) of said Act and assessment is made on basis of return and so decision in case of Addl. CIT v. Bihar Textiles [1975] 100 ITR 253 has also to be reversed. I also agree with P. S. Mishra J. that questions Nos. 2 and 3 as referred by Tribunal have also to be answered against assessee and in favour of Revenue. Although I agree that two decisions of this court, namely, decisions in case of Addl. CIT v. Bihar Textiles [1975] 100 ITR 253 and in case of Addl. CIT v. Dongarsidas Biharilal [1979] 116 ITR 897, have not been correctly decided and they require to be reversed, I am of view that only for purpose of reversing these two decisions, court should not redraft question No. 1 for which I have already given my reasons above. I have given findings on other issues as P. S. Mishra J. and S. K. Jha J. have not agreed with my view that redrafting of question No. I as referred by Tribunal cannot be made for reasons discussed above. S. K. JHA J.-I agree with brother P. S. Mishra J. *** JAMUNADAS MANNALAL v. COMMISSIONER OF INCOME TAX