1. This income-tax reference, at the instance of the Additional Commissioner of Income-tax, arises out of a penalty imposed on the respondent-assessed, M/s. Bhagwat Swarup Charanjit Singh & Co., for the assessment year 1961-62. The assessed was a firm doing business as liquor contractors and the first assessment in the case of the assessed was for the assessment year 1961-62. The returned income of the assessed for the above assessment year was Rs. 4,97,542, much above the exemption limit available for income-tax purposes. Under s. 22(1) of the Indian I. T. Act, 1922, the assessed should have filed its return of income within a period of sixty days from the date of the publication of a general notice issued on or before the first day of May, 1961. It is, thereforee, common ground that the return should have been filed some time in June, 1961. It was, however, filed only on 4th April, 1962. The assessment was made in due course and, thereafter, the ITO initiated proceedings for the levy of a penalty under s. 271 of the I. T. Act, 1961. This was because under s. 297(2)(g) of the Act of 1961 the penalty in a case where the assessment had been completed after the first day of April, 1962, had to be imposed under the 1961 Act. The ITO levied a penalty of Rs. 18,306 under s. 271(1)(a). The assessed appealed unsuccessfully to the AAC and thereafter to the Appellate Tribunal.
2. Before the Tribunal the assessed had raised the following contentions : (1) No penalty was livable in the present case, in view of the observations of the Supreme Court in the case of CIT V. Kulu Valley Transport Co. P. Ltd. : 77ITR518(SC) . (2) The penalty had been levied without considering the contents of a reply filed by the assessed on 31st January, 1966. (3) The delay in the submission of the return was not without reasonable cause having regard to all the circumstances of the case. (4) The notice calling upon the assessed to show cause why a penalty should not be imposed had been issued by one ITO while the penalty had been imposed by a successor officer without giving a fresh notice to the assessed. The Income-tax Appellate Tribunal rejected all these contentions except the one based on the decision of the Supreme Court referred to above. The Tribunal was, however, of opinion that, as contended for by the assessed, the Supreme Court had held in the case above cited that 'a return, whether it is a return of income, profits or gains or of loss must be considered as having been made within the time prescribed if it is made within the time specified in s. 22(3)'. In other words, it had been held that, if s. 22(3) was complied with, s. 22(1) must also be held to have been complied with.
3. The Additional Commissioner was aggrieved by the above decision of the Tribunal and it is at his instance that the Tribunal has referred the following question for our decision :
'Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in holding that for submission of the return for the assessment year 1961-62, on April 4, 1962, no penalty under section 271(1)(a) of the Income-tax Act, 1961, was livable in view of the observations of the Supreme Court in Kulu Valley Transport Co. P. Ltd. : 77ITR518(SC)
4. We must also mention that the assessed attempted to persuade the Tribunal to refer certain other questions regarding the justifiability of imposition of a penalty in the circumstances of this case. But the Tribunal declined to accede to the request partly on the ground that it was not open to the respondent to seek the reference of certain questions in an application preferred by the Commissioner and also because, in the view of the Tribunal, the questions proposed by the assessed sought to attack the finding of the Tribunal which was essentially a finding of fact. In the above circumstances, we have to consider only the very narrow aspect of the imposition of penalty under s. 271(1)(a) which is brought out by the question extracted above.
5. We find that the question raised has been considered by a large number of High Courts and they have all taken a view contrary to the view taken by the Tribunal in the present case. The Madras High Court in K. C. Vedadri v. CIT : 87ITR76(Mad) , the Gujarat High Court in Addl. CIT v. Santosh Industries : 93ITR563(Guj) , the Calcutta High Court in Sunderlal Rethi v. ITO : 97ITR183(Cal) , the Patna High Court in Addl. CIT v. Dongarsidas Biharilal : 116ITR897(Patna) and in Addl. CIT v. Raghunandan Prasad Radhey Shyam : 116ITR948(Patna) and the Madhya Pradesh High Court in Chunnilal and Bros. v. CIT : 119ITR199(MP) , have held that the imposition of a penalty under s. 271(1)(a) for the delayed submission of return under sub-s. (1) or sub-s. (2) of s. 139 is not precluded merely because a return has been filed under s. 139(4) of the Act. It is not necessary to refer to all these decisions in detail. In our opinion, it is sufficient to refer to the Full Bench decisions of two High Courts which have considered the matter in some detail.
6. The Orissa High Court has considered the identical issue in CIT v. Gangaram Chapolia : 103ITR613(Orissa) . It had been argued before the Full Bench, inter alia, that as the assessed had filed the return within the time allowed under s. 139(4), it should be deemed, by reason of the decision of the Supreme Court in the case of Kulu Valley Transport Co. P. Ltd. : 77ITR518(SC) , to have filed the return within the time allowed under s. 139(1) and, consequently, no penalty under s. 271(1)(a) was imposable and that s. 139(4) was in the nature of a proviso to s. 139(1) for all purposes under the Act. This argument was repelled by the Full Bench. The Full Bench gave the following reasons for holding that the provisions of s. 271(1)(a) would be operative in such a case :
(1) The context and setting as well as the plain and natural meaning of the expression used in s. 271(1)(a), namely, 'any person......has without reasonable cause failed to furnish the 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.... within the time allowed and in the manner required by sub-section (1) of section 139 or by such notice, as the case may be' excluded the time within which the return may be filed under s. 139(4) from the ambit of s. 139(1). If the Legislature had intended that even a return filed under s. 139(4) would be sufficient to avoid a penalty it would have used a different language in s. 271(1)(a) with a specific reference to s. 139(4) and (5).
(2) If the assessed's interpretation were to be accepted, the time-limit prescribed in s. 139(1) and (2) would become otiose and wholly unnecessary except for purposes of charging interest.
(3) Kulu Valley's case : 77ITR518(SC) was decided in a different context and related to a loss return where no penalty could be imposed.
(4) If s. 139(4) and (5) were taken as provisos, as it were, to s. 139(1), then a person, filing a return two months later than the time allowed under s. 139(1), would be penalised while another person filing a revised return under s. 139(5) a day before the assessment is made would escape penalty, and
(5) in s. 22 (3) of the 1922 Act there was initially a clause to the following effect : 'and any return so made shall be deemed to be a return made in due time under this section.'
7. This clause was omitted by s. 24 of Central Act 7 of 1939, which indicates that the Legislature clearly intended that default in time was not condoned in the case of delayed returns. The Supreme Court did not notice the omission of this clause in Kulu Valley's case : 77ITR518(SC) as it did not pertain to a penalty proceeding, but was concerned with the carrying forward of a loss.
8. The Allahabad High Court discussed the matter in the decision, Metal Indian Products v. CIT : 113ITR830(All) . The Full Bench of the Allahabad High Court also pointed out that on its language, clause (a) of s. 271(1) referred only to sub-ss. (1) and (2) specifically but not to sub-s. (4) and that if the Legislature had intended that sub-s (4) should act as a proviso to sub-s. (1) or (2), the Legislature would have used the appropriate language. It was also pointed out that such a construction would render the second part of clause (a) of s. 271(1) totally inoperative and redundant. There was no justification for imputing to Parliament an intention to make the basis of distinction a point which renders a part of the enactment otiose. Moreover, the time limit prescribed under sub-s. (4) of s. 139 has no relevance to the accrual of the default, attracting penalty under s. 271(1)(a). The Full Bench also considered the decision of the Supreme Court in Kulu Valley's case : 77ITR518(SC) distinguishable for the reasons given by the Madras Gujarat and Orissa High Courts. The earlier decision of the Allahabad High Court in the case of Seth Devi Chand & Sons : 111ITR724(All) was approved and a decision in the case of ITO v. Adarsh Construction Co. : 70ITR796(All) was distinguished.
9. Mr. Monga, learned counsel for the assessed, contended before us that, notwithstanding the consensus of opinion of the various High Courts in this matter, we should hold that the principle laid down in Kulu Valley's case : 77ITR518(SC) is applicable to a case of this type. He points out that the Supreme Court was concerned in Kulu Valley's case : 77ITR518(SC) with the interpretation of ss. 22 (1) and 22 (2A) and sub-s. (3) of s. 22 of the 1922 Act and that it had categorically held that if a return is filed within the time specified in s. 22 (3), such a return must be considered as having been filed within the time allowed under sub-s. (1) of the above section. He contended that the mere fact that the question now arises in the context of a penalty proceeding would not justify a departure from the principle laid down by the Supreme Court. On the contrary, he contended, in considering a penalty provision, this court should incline in favor of applying the interpretation given by the Supreme Court and not make an attempt to distinguish it. Learned counsel also relied upon the general principles of construction, (a) that in a matter of penalty some contumacious conduct on the part of the assessed should be established (vide Hindustan Steel Ltd. v. State of Orissa : 83ITR26(SC) ), (b) that, if there is a lacuna in the stature, it is for the Legislature to remedy it in an appropriate manner (vide Garg & Co. v. CIT : 97ITR639(Delhi) , and (c) that, if a statutory provision is capable of two constructions, the one in favor of the assessed should be preferred (vide CIT v. Vegetable Products Ltd. : 88ITR192(SC) ).
10. We have considered the contentions of the learned counsel but after devoting considerable though to the provisions, and given careful consideration to all the decisions which have been cited before us, we are of opinion that the principle laid down in the case of Kulu Valley : 77ITR518(SC) cannot be extended to the context of s. 271(1)(a) of the Act. It is no doubt true that the Supreme Court has made observations which, literally and widely construed, might lend support to an argument that a return filed within the time specified under s. 139(4) should be treated as a return made within the time specified or allowed under s. 22(1). But, we think that there are weighty reasons for not extending the operation of this principle to the language of s. 271 of the I. T. Act, 1961. As pointed out by the Allahabad and Orissa High Courts, the result of such a construction will be to render a part of s. 271(1)(a) completely redundant and otiose. The principle of statutory construction is well settled that no statute should be interpreted in such a manner as to render any provision completely meaningless or redundant. It appears to us that, having regard to the context of s. 271(1)(a), the reference to sub-ss. (1) and (2) of s. 139 in the clause should be confined only to returns filed within the time prescribed in sub-ss. (1) and (2) and cannot be extended to a return which may be filed validly but under sub-s (4) of such section. We do not think that it is necessary to elaborate the point further as it is already covered by a series of decisions and the real ground of decision is within a very narrow compass as already outlined. We, thereforee, agree, with respect, with the various decisions cited before us and hold that the Tribunal was not correct in applying the principle laid down in Kulu Valley's case, : 77ITR518(SC) and in holding that the imposition of penalty under s. 271(1)(a) was not justified.
11. Before parting with the matter we may refer to two earlier decisions of this court which have touched upon the matter indirectly. In P. N. Sikand v. CIT : 126ITR202(Delhi) , this Bench had to consider whether a penalty under s. 271(1)(a) could be imposed for default under s. 139(1) even after a notice under s. 139(2) had been issued. The court answered the question in the affirmative. The issue presently raised before us was not raised or discussed by the court but it is quite clear that if the present contentions were correct then even in such a case no penalty would have been imposable under s. 271(1)(a) for the delay in the filing of the return under s. 139(1). The other decision which has been referred to, is that in the case of O. P. Malhotra (ITR No. 10/71 decided on 16th February, 1981 - : 129ITR379(Delhi) ]. In that case this Bench was concerned not with the question of penalty but with the question of the validity of an assessment. But the argument that was considered was whether, in view of the decision in Kulu Valley's case : 77ITR518(SC) , a return filed under s. 139(4) could be equated to a return under s. 139(1). That contention was repelled by the Bench and it was held that the principle of Kulu Valley's case : 77ITR518(SC) could not be extended to bring about a total identity between a return under sub-s. (4) and a return under sub-s. (1). These two decisions indirectly touch upon the issue in the present case and proceed on the same lines as we have indicated above. They also, thereforee, support the contention of the learned counsel for the department.
12. For the reasons stated above, we answer the question referred to us in the negative and in favor of the department. The department will be entitled to its costs. Counsel's fee, Rs. 300.