K.L. Roy, J.
1. Two orders imposing penalties under Sections 271 and 273 of the Income-tax Act, 1961, on the petitioners in respect of the assessment year 1959-60 have been challenged in this application under Article 226 of the Constitution. Difficult questions as to the legality of the assessment made for that year and the penalties imposed under the 1961 Act in respect of the assessment year 1959-60, for which the return was alleged to have been filed before the 1961 Act came into operation, were canvassed during the course of the arguments but in the view I have taken it is not necessary for me to decide those questions. It is claimed in the petition that a partnership firm styled, Onkarmull Kanailall & Co., was incorporated some time in the year 1943 and registered under the Indian Partnership Act and at the material time the partners of the said firm were, (1) Kanailall Jatia, (2) Ghanshyamdass Jatia, (3) Mahabir Prosad Jatia, (4) Deokinandan Jatia, (5) Sreemohan Jatia, (6) Smt. Tribeni Devi Jatia, (7) Smt. Rammurti Jatia, (8) Smt. Pushpa Jatia and (9) Smt. Ratni Jatia. The returns of the income of the business carried on by Onkarmull Kanailall & Co., up to and including the assessment year 1958-59, have been filed in the status of a registered firm but in all these years the business has been treated to be the proprietary concern of Kanailall Jatia and the income therefrom included in the personal assessment of Kanailall though as a protective measure assessments have also been made on the firm as an unregistered firm. For one of those years an appeal was taken to the Income-tax Appellate Tribunal which upheld the contention of the department that the business was the proprietary business of Kanailall Jatia. The said Kanailall Jatia died on the 19th January, 1958, leaving him surviving his four sons and his widow, who are the petitioners in the present application, as his heirs and legal representatives. In respect of the assessment year 1959-60, relevant to the accounting period 23rd October, 1957, to the 10th November, 1958, a return was filed on behalf of the partnership firm, Onkarmull Kanailall & Co., by Ghanshyamdass Jatia as a partner on or about the 27th October, 1959, showing the total income of the firm for that year at Rs. 1,03,893.91. This return was filed within the period of time to file the returns as extended by the respondent-Income-tax Officer. On the 12th October, 1963, two separate returns for the said assessment year, one for the period from 23rd October, 1957, to 19th January, 1958, and the other for the period 20th January, 1958, to 10th November, 1958, were filed by the firm through its aforesaid partner in place of the original return dated 27th October, 1959, accompanied by a letter of that date recording that as desired by the respondent-Income-tax Officer, during the hearing of the assessment of the firm two separate returns in place of the original return already filed were being enclosed. In the affidavit-in-opposition though it has been denied that the two new returns were filed at the direction of the Income-tax Officer, the receipt of the aforesaid letter is not denied. It is further claimed in the petition that the respondent-Income-tax Officer made an assessment on the firm in respect of the first period, i e., up to the date of the death of Kanailall Jatia in the status of an unregistered firm and made an assessment for the second period, i.e., on and from the death of Kanailall on Messrs. Onkarmull Kanailall & Co., a Hindu undivided family consisting of the heirs and legal representatives of the deceased. In the affidavit-in-opposition it is contended that the assessments for both the above periods were made on the heirs and legal representatives of Kanailall Jatia but in respect of the first period a protective assessment was also made on the firm as an unregistered firm. At the hearing the department could not establish that any assessment for the first period has been made on the heirs and legal representatives of Kanailall Jatia. It must, therefore, be accepted that for the period up to the 19th January, 1958, the assessment has been made on the unregistered firm of Onkarmull Kanailall & Co. By an order dated the 2nd February, 1966, purported to have been made under Section 271(1)(a) of the Income-tax Act, 1961, a penalty of Rs. 27,709.66 was levied on the Hindu undivided family of Onkarmull Kanailall & Co. on the ground that the return for the above assessment year was filed voluntarily on the 14th November, 1963, when it should have been filed by the assessee by June, 1959, under Section 22(1) of the Income-tax Act, 1922. As there was a default in filing the return for four years and four months and as the assessee could not give any satisfactory explanation therefor, in spite of opportunity being given, the above amount was directed to be paid by the assessee as penalty under Section 271(a) . The penalty was calculated at 50 per cent. Of the total amount of tax demanded. On the same date the second order of penalty purported to be under Section 273 of the 1961 Act was made by the respondent-Income-tax Officer, directing the Hindu undivided family to pay a penalty of Rs. 4,081.40 for failure to file an estimate under Section 18A(2) of the 1922 Act.
2. It should be mentioned here that on the application of the petitioners a rule nisi was issued by this court directing the present respondents to show cause why the two assessments for the year 1959-60 should not becancelled and/or set aside. The above rule has since been discharged by B. C. Mitra J., on the ground that it was not necessary to decide the issue as to whether the assessments were illegal.
3. The petitioners challenge the aforesaid orders of penalty on, inter alia, the following grounds :
(a) That the respondent-Income-tax Officer failed to consider the fact that the returns for the assessment year were filed by Onkarmull Kanailall & Co., as a firm through its partner and not as a Hindu undivided family;
(b) that as the original return was filed under the Indian Income-tax Act, 1922, the proceedings for assessment should have been completed under that Act and the purported penalty proceedings under sections 271 and 273 of the 1961 Act were illegal and ultra vires.
(c) That the assessee had a right to file a revised return at any time before the assessment was completed and as such the respondent-Income-tax Officer was in error in imposing the penalty on the ground that there has been a default in riling the return in time,
(d) That as Onkarmull Kanailall & Co. was not a new assessee, Section 18A(3) of the 1922 Act did not apply and the purported order of penalty under Section 273 was illegal and void.
4. In the affidavits-in-opposition much stress has been laid on the fact that the department has always treated the business of Onkarmull Kanailall & Co. as the proprietary business of Kanailall Jatia and has made all past assessments on that basis and that the decision of the department in that behalf was upheld by the Tribunal on appeal. As the department did not accept the claim of Onkarmull Kanailall & Co. to be a firm the income for the period up to the death of Kanailall Jatia was included in the individual income of the deceased while the income for the period after his death was assessed on his heirs and legal representatives. It is contended that as no appeal was filed against the assessment, the assessment has become final and could not be challenged. Surprisingly enough, nothing has been said in either of the two affidavits filed on behalf of the department about the original return and the two new returns particularly as the impugned orders of penalty are based on the department's contention that the returns filed in 1963 were voluntary returns filed on behalf of the Hindu undivided family.
5. Dr. Pal submitted, firstly, that as Section 22(3) of the 1922 Act permits an assessee to file a revised return at any time before the assessment is made the petitioners were entitled to file such revised returns on 14th November, 1963, and as the revised returns were in continuation of the original return filed there is no question of any default in filing the return within the time mentioned in Section 22(1). An assessee can file a returnunder Section 22(3) only when he has not furnished a return within the time allowed. Where a return has already been filed he can only file a revised return. The well-known decision of the Supreme Court in Ranchhoddas'scase, : 36ITR569(SC) . was relied on for the proposition that a return can be filed in answer to the notice under Section 22(1) at any time before the assessment and the Income-tax Officer cannot choose to ignore the return. Similar observations were also made in some of the subsequent decisions of the Supreme Court, as for example, in the case of Raman Chettiar, : 55ITR630(SC) .
6. Dr. Pal next contended that as the original return was filed before the 1961 Act came into operation the assessment made in this case and all proceedings thereunder including the proceedings for penalty should have been taken under the provisions of the 1922 Act and the penalty proceedings initiated under sections 271 and 273 of the 1961 Act were bad. Dr. Pal further contended that even if the assessment was not challenged on appeal and had become final and conclusive, as it is a nullity it can be challenged collaterally. In this case the assessment being completed under the new Act is void ab initio under the provisions of Section 297(2)(a) of the 1961 Act and as such the penalty proceedings based on such an assessment are also void.
7. Mr. Sen, the learned counsel for the department, pointed out that the Income-tax Appellate Tribunal had held in an appeal preferred by the firm that the business was a proprietary concern of Kanailall Jatia. So when the return for the assessment year 1959-60 was purported to be filed by the firm the Income-tax Officer could not act on such a return and whether, at the instance of the Income-tax Officer or otherwise, the petitioners filed fresh returns, the Income-tax Officer could act on such returns and make the assessments on the basis thereof. Mr. Sen also stated that the assessments for both the periods in that year were made on the heirs of Kanailall Jatia, and protective assessments were also made on the firm but was unable to satisfy me that any assessment was made on the heirs of Kanailall Jatia for the first period. Mr. Sen contended that, in any event, as the petitioners had challenged the validity of the assessment under Article 226 and obtained a rule which was finally discharged by B. C. Mitra J., the validity of the assessment could no longer be challenged even collaterally. Mr. Sen submitted that the two returns filed in November, 1963, could not be revised returns as claimed, as two revised returns could not be submitted in revision of one original return. Further, a revised return would be a return for correcting any omission or wrong statement in the original return, i.e., some mistakes or something left out by inadvertence as contemplated in Section 22(3) of the 1922 Act. The returns filed on the basisof the death of Kanailall for the two periods before and after such death could not be called revised returns.
8. In my opinion, both Dr. Pal and Mr. Sen have missed the forest for the trees. The learned counsel have failed to notice that both the original return and the so called revised returns were filed on behalf of the firm by ,one of its partners. No returns either original or revised were filed on behalf of the Hindu undivided family constituted by the heirs of Kanailall Jatia deceased. So far as the heirs of Kanailall Jatia deceased are concerned, for the assessment year 1959-60 it is at the most a case of failure to furnish the return and not a case of a failure to furnish a return within the time allowed. If any penalty was leviable it would have been leviable either under Section 28(1)(a) of the 1922 Act or Section 271(a) of the 1961 Act for having without reasonable cause failed to furnish the return of income under the respective sections of the two Acts. In this case the penalty under Section 271(a) has been imposed on the basis of default in filing the return for four years, that is to say, for late filing of the return and the penalty has been calculated at 50 per cent of the total tax demanded. In fact the impugned order for penalty shows that the respondent-Income-tax Officer has treated the return filed by the firm in 1963, as the voluntary return filed by the Hindu undivided family. As there is no question of any failure of the assessee Hindu undivided family to furnish its return within the time allowed, the order for penalty must be held to be erroneous.
9. As regards the order of penalty under Section 273 of the 1961 Act for failure to file an estimate of advance tax under Section 18A(2) of the 1922 Act, Dr. Pal's argument was not very convincing. He submitted that as the Income-tax Officer himself assessed Kanailall and Co. in the status of an unregistered firm for the first period of the assessment year 1959-60 and as on the death of Kanailall Jatia the firm was reconstituted and continued, no new assessee came into existence. There was, therefore, no obligation to file any estimate and to pay any advance tax under Section 18A(3) of the 1922 Act. In any event the reference to Section 18A(2) in the impugned order of penalty was wrong. Mr. Sen, on the other hand, contended that on the death of Kanailall Jatia, who had always been assessed as an individual and the income from the business included in his individual assessment, his legal representatives became assessees who have not hitherto been assessed and were as such liable to file an estimate and to pay advance tax. As in this case the assessment for the second period, i.e. for the period after the death of Kanailall Jatia, has been made on his heirs and legal representatives, such heirs and legal representatives should have filed an estimate under Section 18A(3) and paid the tax on the death of Kanailall Jatia. The failure to do so would render them liable to penaltyunder Section 273 of the 1961 Act. If the validity of the assessment cannot be challenged I cannot see any escape from the consequential liability either under Section 18A(3) of the 1922 Act or Section 212(3) of the 1961 Act. I do not think that there is any substance in Dr. Pal's contentions that these assessments made on the heirs and legal representatives of Kanailall deceased were invalid and void under Section 297(2)(a) of the 1961 Act, As no returns were filed by the heirs either before or after the coming into operation of the 1961 Act, there is no question of the assessment made in the year 1965 being made under the provisions of the 1922 Act. In my opinion, in the circumstances of this case the second impugned order, namely, the order of penalty under Section 273 of the 1961 Act cannot be challenged. The mention of Section 18A(2) in the impugned order is obviously a typographical error which had not misled the petitioners.
10. In the result, the rule is made absolute so far as the penalty order under Section 271(1)(a) of the 1961 Act dated the 2nd February, 1966, and the same is set aside and/or quashed and the respondents are directed to forbear from taking any steps in furtherence thereof. The rule is discharged in so far as the second impugned penalty order under Section 273 of that date is concerned. There will be no order as to costs. On the oral application of the learned advocate for the petitioner, the operation of this order is stayed for 4 weeks.