S. Ranganathan, J.
(1) (ORAL). 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 Section 22(1) of the Indian Income-tax 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 income-tax Officer initiated proceedings for the levy of a penalty under Section 271(l)(c) of the Income-tax Act, 1961. This was because under Section 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 Income-tax Officer levied a penalty of Rs. 18,306 under Section 271(1)(a). The assessed appealed unsuccessfully to the Appellate Assistant Commissioner and 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 Commissioner of Income Tax v. Kulu Valley Transport Co. P. Ltd. ( : 77ITR518(SC) (1); (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 Income-tax Officer 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 turn by the assessed, the Supreme Court bad 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 Section 22(3)'. In other words-it had been held that if Section 22(3) was complied with, Section 22(1) must also be held to have complied with.
(3) The Additional Commissioner of Income-tax 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 fact 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 4-4-1962 as 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 of Income-tax and also because in the view of the Tribunal the questions proposed by the assesee sought to attack the findings 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 Section 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 in Court K.C. Vedadri v. Commissioner of Income Tax : 87ITR76(Mad) ) (2), the Gujarat High Court in Additional Commissioner of Income Tax v. Santosh Industries 1974 93 Itr 567 (3), the Calcutta High Court in Sunderlal Rethi v. Income-tax Officer : 97ITR183(Cal) (4) the Patna High Court in Additional Commissioner of Income Tax v. Dongarsidas Biharilal : 116ITR897(Patna) (5) and in Additional Commissioner of Income Tax v. Raghunandan Prasad, Radhey Shyam : 116ITR948(Patna) (6) and the Madhya Pradesh High Court in Chunnilal and Bros. v. Commissioner of Income Tax : 119ITR199(MP) have held that the imposition of a penalty under Section 271(1)(a) for the delayed submission of return under sub-section (1) or sub-section (2) of Section 139 is not precluded merely because a return has been filed under Section 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 Commissioner of Income Tax v. Gangaram Chapolia 1976 183 Itr 613 (8). It had been argued before the full bench, inter alia, that as (the assessed had filed the return within the time allowed under Section 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., to have filed the return within the time allowed under Section 139(1) and consequently no penalty under Section 271(1)(a) was impossible and that Section 139(4) was in the nature of a proviso to Section 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 Section 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 Section 271(1)(a), namely, 'any person......has without reasonable cause failed to furnish the return to 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 inquired by sub-section (1) of section 139 or by such notice, as the case may be' excluded that time within which the return may be filed under Section 139(4) from the ambit of Section 139(1). If the legislature had intended that even a return filed under Section 139(4) would be sufficient to avoid a penalty it would have used different language in Section 271(1)(a) with specific reference to Section 139(4) and (5); (2) if the assessed's interpretation were to be accepted, the time limit, prescribed in Section 139(1) and (2) would become otiose and wholly unnecessary except for purposes of charging interest; (3) Kulu Valley's case was decided in a 'different context and related to a loss return where no penalty could be imposed; (4) if Section 139(4) & (5) were taken as provisos, as it were to Section 139(1) than a person filing a return two months later than within the time allowed under Section 139(1) would be penalised while another person filing a revised return under Section 139(5) a day before the assessment is made would escape penalty; and (5). In Section 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.'
This clause was omitted by section 24 of the 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 as it did not pertain to a penalty proceeding, but was concerned with the carrying forward of a loss.
(7) The Allahabad High Court discussed the matter in the decision reported as Metal India Products v. Commissioner of Income Tax : 113ITR830(All) (9). The full bench of Allahabad High Court also pointed out that on its language clause (a) of Section 271(1) referred only to sub-sections (1) & (2) specifically but not to sub-section (4) and that if the legislature had intended that sub-section (4) should act as a proviso to sub-section (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 Section 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-section (4) of Section 139 has no relevance to the accrual of the default attracting penalty under Section 271(1)(a). The full bench also considered the decision of the Supreme Court in Kulu Valley's case 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) (10) was approved and a decision in the case of Income tax Officer v. Adarsh Construction Co., : 70ITR796(All) (l 1) was distinguished.
(8) Mr. Monga, learned counsel for the assessed contended before us that notwithstanding the consensus of opinion of various High Court in this matter we should hold that the principle laid down in 'the Kulu Valley's case is applicable to a case of this type. He points out that the Supreme Court was concerned in the Kulu Valley's case with the interpretation of Section 22(1) and (2A) and sub-section (3) of Section 22 of the 1922 Act and that it had categorically held that if a return is filed within the time specified in Section 22(3) such a return must be considered as having been filed within the time allowed under sub-section (1) of the above section. We 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) ) (12), (b) that if there is a lacuna in the statute it is for the legislature to remedy it in an appropriate manner (Vide Garg & Co. v.CIT, : 97ITR639(Delhi) ) (13) and (c) that, if a statutory provision is capable of two constructions, the one in favor of the assessed should be preferred (vide Commissioner of Income Tax v. Vegetable Products Ltd., : 88ITR192(SC) ) (14).
(9) We have considered the contentions of the learned counsel but after devoting considerable thought 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 cannot be extended to the context of Section 271(1)(a) of the Act. It is no doubt true that the Supreme Court has made observations which literally and widely construed might land support to an argument that a return filed within the time specified under Section 139(4) should be treated as a return made within the time specified or allowed under Section, 22(1). But we think that there are weighty reasons for not extending the operation of this principle to the language of Section 271 of the Income-tax 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 Section 271(l)(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 Section 271(1)(a) the reference to sub-sections (1) & (2) of Section 139 in that clause should be confined only to returns filed within the time prescribed in sub-sections (1) & (2) and cannot he extended to a return which may be filed validly but under subsection (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 the Kulu Valley's case and holding that the imposition of penalty under Section 271(l)(a) was not justified.
(10) Before parting with the matter we may refer to two earlier decisions of this court which have touched Tipon the matter indirectly. In T.N. Sikand v. Commissioner of Income Tax 1980 126 ITR-292 (15) this bench had .to consider whether a penalty under Section 271(1)(a) could be imposed turn default under Section 139(1) even after a notice under section 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 if the present contentions were correct then even in such a case no penalty would have been impossible under Section 271(l)(a) for the delay in the filing of the return under Section 139(1). The other decision which has been referred to is that in the case of O.P. Malhotra, (I.T.R. 10171 decided on 16th February, '81) (16) 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 the Kulu Valley's case a return filed under Section 139(4) could be equated to a return under Section 139(1). That contention was replied by the bench and it was held that the principle of the Kulu Valley's case could not be extended to bring about a-total identity between a return under sub-section (4) and a return under subsection (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.
(11) 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.