AMIN CHAND PAYARELAL versus INSPECTING ASSTI. COMMISSIONER, INCOME TAX AND ORS.

Citation: [2006] SUPP. 5 S.C.R. 730 · Decided: 05-09-2006 · Supreme Court of India · Bench: ASHOK BHAN · Disposal: Dismissed

Judgment (excerpt)

A 
B 
AMIN CHAND PAY ARELAL 
v. 
INSPECTING ASSTI. COMMISSIONER, INCOME TAX AND ORS. 
SEPTEMBER 5, 2006 
[ASHOK BHAN AND MARKANDEY KA TJU, JJ.] 
Income Tax Act, 1961--Sections 139(4) and 271(/)(a)-Filing of return 
beyond the extended period under s.139(4)-Penalty-lmposition of-
C Justification-Held: Provision that assessee may file return any time before 
assessment is made would not absolve assessee from the liability to pay 
penalty-Even if assessee deposits interest for late filing, penalty, could be 
levied under s.271 (/)(a). 
The question which arose for consideration in the present appeal was 
D that when return has been filed beyond the extended period for filing under 
section 139(4) of the Income Tax Act, 1961 and the assessee has paid interest 
for the late filing, whether penalty under section 271(1)(a) of the Act could 
be levied thereon. 
E 
Dismissing the appeal, the Court 
HELD: Sub-section (4) of Section 139 of the Income Tax Act, 1961 
provides for a situation where the returns are not filed by an assessee within 
the time allowed or within the extended period for filing such returns. Merely 
because sub-section (4) of Section 139 enable the assessee to file his return 
at any time before the assessment is made, it does not mean that his liability 
F to pay penalty under Section 27l(l)(a) is erased. The penalty could be levied 
under Section 27l(l)(a) of the Act. The impugned judgment of the Division 
Bench of High Court that mere deposit of interest would not absolve the 
assessee from its liability to pay the penalty under section 271(1)(a) of the 
Act is upheld. (735-A, G; 736-A-BJ 
G 
H 
Commissioner of Income Tax, A.P. v. M. Chandra Sekhar, (1985) 151 
ITR 433, distinguished. 
Pradip Lamps Works v. Commissioner of Income Tax, (2001) 249 ITR 
797, relied on. 
730 
' 
AMIN CHAND PA YARELAL 1·. INSPECTING ASSTI. COMMISSIONER, INCOME TAX [BHAN, J.] 73 J 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4114 of2001. 
A 
From Judgment and Order dated 28.9.2000 of the High Court of Calcutta 
in F.M.A. No. 1160/1990. 
Anil Roychowdhury, Raja Chatterjee, Sutapa Roychowdhury, Sachin 
Das and G.S. Chatterjee for the Appellant. 
B 
Harish Chandra, Preetesh Kapur, Arijit Prasad and B.V. Bairam Das for 
the Respondents. 
The Judgment of the Court was delivered by 
BHAN, J. This appeal is directed against the order dated 28th September, 
2000 passed by a Division Bench of the High Court of Calcutta in FMA No. 
1160 of 1990 whereby the Division Bench has set aside the order passed by 
the Single Judge of the same Hign Court and dismissed the writ petition filed 
by the writ petitioner-appellant. 
Brief facts giving rise to file the present appeal by special leave are as 
follows: 
The appellant filed a writ petition in the High Court, inter alia, seeking 
c 
D 
an appropriate writ, order or directions and/or to withdraw the order dated 
26th September, 1974 passed by the Commissioner of Income Tax, Central and E 
the orders of assessment and penalty proceeding under Section 271 (I )(a) of 
the Income Tax Act, 1961 (for short "the Act") and the demand notice issued 
under Section 156 of the Act and also the order dated 7th of October, 1974 
imposing penalty. 
The learned Single Judge before whom the writ petition came up for F 
hearing allowed the writ petition and held that the penalty imposed by the 
Authorities was not in accordance with law and consequently the order 
imposing penalty and demand notice for realization of penalty for the 
assessment years 1959-60 to 1965-66 was quashed. 
The learned Single Judge allowed the writ petition on the grounds(a) 
that the imposition of penalty was without jurisdiction in view of the fact that 
interest had been paid for late filing of the returns for the aforesaid years; and 
(b) that the penalty under Section 271(1)(a) of the act could not be imposed 
G 
by the Inspecting Assistant Commissioner of Income Tax as he had no 
jurisdiction to do so and, only the Income tax Officer was competent to H 
". 
732 
SUPREME COURT REPORTS [2006] SUPP. 5 S.C.R. 
A impose penalty as per provisions of Section 27l(l)(a) of the Act. 
During the course of arguments, counsel appearing for the respondent-
assessee before the Division Bench of the High Court, the appellant herein, 
did not dispute the jurisdiction of the Inspecting Assistant Commissioner of 
the Income Tax to impose the penalty for not filing the returns within the 
B extended period. The Division Bench recorded the fol

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