BROOME J. - This writ petition filed by Messrs. Tarzan Hosiery Private Limited of Kanpur against the Income-tax Officer of district I(B) Ward of Kanpur, has been referred to us for decision at the instance of Pathak J. on the ground that it raises questions of great importance. The facts of the case are as follows : On June 22, 1964, the petitioner received a notice dated April 8, 1964, from the respondent under section 139(2) of the Income-tax Act, 1961, requiring a return of total income for the assessment year 1964-65, to be filed by July 25, 1964. On July 24, 1964, the petitioner applied for extension of time up to August 30, 1964, but this was refused by the respondent, with the result that the petitioner was unable to file the return within the time allowed and became liable for the payment of interest and to the imposition of penalty.
The petitioners contention is that, in accordance with the provisions of sub-section (1) of section 139 of the Act, the petitioner was entitled to file its return of income up to September 30, 1964, and that the respondent had no right to demand a return to be filed earlier under sub-section (2) of the section.
The relevant sub-sections of section 139 (omitting the provisos) run as follows :
139. '(1) Every person, if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax, shall furnish a return of his income or the income of such other person during the previous year in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed -
(a) in the case of every person whose total income, or the total income of any other person in respect of which he is assessable under this Act, includes any income from business or profession, before the expiry of six months from the end of the previous year or where there is more than one previous year from the end of the previous year which expired last before the commencement of the assessment year, or before the 30th day of June of the assessment year, whichever is later;
(b) in the case of every other person, before the 30th day of June of the assessment year :......
(2) In the case of any person who, in the Income-tax Officers opinion, is assessable under this Act, whether on his own total income or on the total income of any other person during the previous year, the Income-tax Officer may, before the end of the relevant assessment year, serve a notice upon him requiring him to furnish, within thirty days from the date of service of the notice, a return of his income of such other person during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed.....'
In the case of the petitioner, whose income is derived from business and whose accounting period corresponds with the financial year, the time for filing the return of income under sub-section (1) of section 139 was up to September 30, 1964 (i.e., before the expiry of six months from the end of the previous year); but the respondent, acting under sub-section (2), has demanded a return by July 25, 1964. The argument advanced on behalf of the petitioner is that sub-section (2) of section 139 only comes into play when the period prescribed for the voluntary submission of the return under sub-section (1) of the section has expired and that, consequently, the notice served on the petitioner requiring the return to be filed by July 25, 1964, was illegal. Alternatively, it is argued that if sub-section (2) is construed as meaning that a demand for the return can be made before the expiry of the period prescribed by sub-section (1), there will be an infringement of article 14 of the Constitution, inasmuch as the Income-tax Officer will have been given an unfettered discretion to discriminate between assessees similarly placed by requiring one to submit a return before the expiry of the period prescribed under sub-section (1), while allowing the other to file a return after the expiry of that period.
On a plain reading of the two sub-sections (1) and (2) of section 139, we find no force in the argument that sub-section (2) can only operate after the period prescribed by sub-section (1) is over. The two sub-sections in fact deal with two distinct and different aspects of the procedure for submitting returns : sub-section (1) imposes an obligation on all persons whose income is assessable to tax to furnish a return within a certain specified time without being asked to do so; while sub-section (2) confers a power on the income-tax authorities to demand a return at any time before the expiry of the assessment year. We find no incompatibility or repugnance between these two provisions and we see no reason why both of them should not operate simultaneously to their full extent. Reading the two sub-sections harmoniously together, we are of opinion that the intention of the section is that all persons liable to assessment should be under an obligation to furnish a return of income within the time prescribed by sub-section (1) (i.e., either by 30th of June or by 30th of September of the assessment year), provided they have not already been asked by the Income-tax Officer to furnish a return by means of a notice under sub-section (2). There is nothing in the wording of these two sub-sections themselves that would lead to the inference that sub-section (2) was not meant to operate during the period prescribed for the submission of the return under sub-section (1).
Furthermore, it is clear from sub-section (7) of section 139 that a return under sub-section (2) can be demanded and furnished before the return under sub-section (1) is due. This provision is as follows :
'(7) No return under sub-section (1) need be furnished by any person for any previous year if he has already furnished a return of income for such year in accordance with the provisions of sub-section (2).'
Mr. Pachauri, who appears for the petitioner, admits that clause (7) envisages the furnishing of a return under clause (2) before the expiry of the period prescribed by clause (1), but argues that this is only meant to provide for the contingency of accelerated assessments under sections 174, 175 and 176, which permit assessments to be made during the course of an assessment year if the person concerned is leaving India or is likely to transfer property to avoid the tax or has discontinued business. In such cases returns may be demanded from the person concerned in the form prescribed by section 139(2); and the suggestion is that sub-section (7) of section 139 is meant to apply solely to returns of that nature. We are not, however, impressed by this argument. Sections 174, 175 and 176 relate to exceptional cases for which a special procedure has been provided; and it is only the form of the notice under section 139(2) that has been imported into those sections. The actual provisions of section 139(2) are in no way applicable to such cases. Section 139(2), for example, required a return of income only for the previous year, whereas section 174 envisages a return not only for the previous year but also for part of the current year; and whereas section 139(2) lays down that the period of notice shall be 30 days, under section 174 the period is only seven deys. We are unable to agree therefore that section 139(2) was enacted for the purpose of providing a procedure for the exceptional cases dealt with in sections 174, 175 and 176; and in our opinion sub-section (7) of section 139 cannot be construed as referring only to the returns submitted in those exceptional cases.
It has further been pointed out to us by learned counsel for the respondent that if sub-section (2) of section 139 were to be interpreted as operating only after the expiry of the period prescribed by sub-section (1), practical difficulties would arise in its implementation. In the case of a person not previously assessed, for example, it would often not be possible for the Income-tax Officer to know that persons source of income or the accounting period followed by him, with the result that a notice might be issued under sub-section (2) as soon as the 30th of June passed, on the assumption that was the final date for compliance with sub-section (1) by that particular assessee; but if later on it transpired that the final date in his case actually was the 30th of September, the notice would be void. Similar difficulties would arise in the case of an assessee changing his period of accounting. We find it difficult to believe that the framers of the Act could have intended the provisions of section 139 to lead to such an anomalous result.
We, therefore, hold that the power conferred on the Income-tax Officer by sub-section (2) of section 139 can be exercised at any time during the relevant assessment year, not only after but also before, the expiry of the period prescribed for the return of income under clause (1) of the section.
The question now arises whether in this view of the matter it can be said that article 14 has been infringed. As already pointed out by us above the two sub-sections (1) and (2) of section 139, read together, merely confer a right on assessees to file their returns of income up to the 30th of June or 30th of September as the case may be, provided they have not already been served with notice under sub-section (2). This provision of law applies to all assessees without distinction and no question of discrimination therefore arises. No doubt, in individual cases it is conceivable that unfair discrimination may be practised by the Income-tax Officer in the implementation of these provisions of law by male fide curtailing the time allowed to one assessee for the submission of his return, while giving more latitude to another. But no material has been adduced in the present case to establish any such plea.
The result is that we see no force in either of the contentions advanced on behalf of the petitioner. We see no reason to hold that sub-section (2) of section 139 can operate only after the expiry of the period prescribed by sub-section (1); nor do we find that sub-section (2) infringes article 14. This writ petition accordingly fails and is dismissed with costs. The stay order granted by this court on August 12, 1964, is vacated.