JUDGMENT
MRS. SUJATA V. MANOHAR C.J. – This is a petition under section 256(2) of the Income-tax Act, 1961, read with section 18 of the Companies (Profits) Surtax Act, 1964. The assessee in the present case is the Cochin Malabar Estates and Industries Ltd. The assessment year is 1967-68. The present petition is at the instance of the Department requesting us to direct the Tribunal to refer the following two questions to us :
“1. Whether, on the facts and in the circumstances of the case, the levy of penalty under section 9 of the Companies (Profits) Surtax Act, 1964, is valid and within jurisdiction ?
2. Whether, on the facts and in the circumstances of the ècase, the Tribunal is right in law in cancelling the penalty on the ground that the same is not at all warranted and the officer is not at all competent to invoke section 9 for imposing the penalty ?”
The assessee had to file the return of chargeable profits as per the Companies (Profits) Surtax Act, 1964, for the assessment year 1967-68 on or before September 30, 1967. The assessee, however, filed its return on January 31, 1979. On the basis of the return so filed, the Income-tax Officer completed the assessment on March 6, 1979, on a chargeable profit of Rs. 1,26,900 and levied surtax of Rs. 44,415. As the assessee had not filed its return within the statutory period, penalty proceedings under section 9 of the Surtax Act were initiated. The Income-tax Officer was not satisfied with the explanation offered by the assessee for the delay in filing the return. He, therefore, levied a penalty of Rs. 22,200 under section 9(a) of the said Act. On appeal the Commissioner of Income-tax (Appeals) confirmed the order of the Income-tax Officer. The assessee filed second appeal before the Tribunal. The Tribunal found that the Income-tax Officer had completed the assessment on the basis of the return filed by the assessee and the assessee filed the return before the assessment was completed. The Tribunal, therefore, held that the Income-tax Officer was not competent to invoke section 9 for imposing the penalty on the ground of late filing of the return. Being aggrieved by the order of the Tribunal, the Department filed a petition under section 256(1) of the Income-tax Act, 1961, read with section 18(1) of the Surtax Act seeking reference of the above two questions, which petition has been dismissed by the Tribunal. Hence, the present petition has been filed before us.
The relevant sections which require to be considered in this connection are sections 5 and 9 of the Companies (Profits) Surtax Act, 1964. Under section 5(1) of the Companies (Profits) Surtax Act, 1964, every company whose chargeable profits assessable under this Act exceeded during the previous year the amount of statutory deduction, is required to file a return of the chargeable profits during the previous year in the prescribed form before September 30 of the assessment year provided that on an application made in this behalf, the Assessing Officer may in his discretion, extend the date for the furnishing of the return.
Section 5(3) is as follows :
“Any assessee who has not furnished a return during the time allowed under sub-section (1) or sub-section (2), or having furnished a return under sub-section (1) or sub-section (2) discovers any omission or wrong statement therein, may furnish a return or revised return, as the case may be, at any time before the assessment is made.”
The relevant portions of section 9 are as follows :
“If the Assessing Officer, in the course of any proceedings under this Act, is satisfied that any person has, without reasonable cause, failed to furnish the return required under section 5, . . . he may direct that such person shall pay, by way of penalty, in addition to the amount of surtax payable, a sum not exceeding –
(a) where the person has failed to furnish the return required under section 5, the amount of surtax chargeable under the provisions of this Act;. . . .”
The provisions of section 9 would, therefore, be attracted èonly if the Assessing Officer is satisfied that a person has, without reasonable cause, failed to furnish the return as required under section 5. Under section 5(1), the assessee is required to file his return on or before September 30 of the assessment year. There is also power in the Assessing Officer to extend the date for furnishing the return. Section 5(3) further provides that any assessee who has not furnished the return during the time allowed under sub-section (1) may furnish a return at any time before the assessment is made. Therefore, the assessee has a right to furnish the return before the assessment is made. There is no provision under section 9 which imposes a penalty for filing the return after September 30 of any assessment year or the extended date and before the assessment is made. In other words, there is no provision in section 9 for levying a penalty only for a late filing of the return, even though the return may be filed before the assessment is made. The provisions of section 9 would not be attracted in a case where the assessee had in fact filed the return before the assessment is made and the assessment has been made on the basis of the return filed by the assessee.
Looked at slightly differently, since under section 5(3), a return can be filed by an assessee before the assessment is made, it cannot be said in the case of an assessee who has filed the return before the assessment is made, that he has failed to furnish the return as required under section 5. The assessee, in the present case, having furnished the return within the time prescribed in section 5(3) cannot, therefore, be considered as having failed to furnish the return as required under section 5. We are fortified in our conclusion by the decisions of at least three High Courts which were pointed out to us.
In the case of Calcutta Chromotype Pvt. Ltd. v. ITO [1971] 80 ITR 627, the Calcutta High Court considered the provisions of section 6(1) of the Super Profits Tax Act, 1963, and section 10 of the said Act. Under section 6(3) of the Super Profits Tax Act also the assessee who has not furnished the return during the time allowed by the Income-tax Officer may furnish a return before the assessment is made. The penal provision of section 10 is similar to section 9 of the Companies (Profits) Surtax Act. Interpreting this provision, the Calcutta High Court, has held that if it was the intention of the Legislature to penalise an assessee for filing a return not within the time allowed under the section, while permitting the assessee to file such a return at any time before the assessment was actually completed, then unless there were specific words in the section imposing such penalty as there are in the corresponding sections of the Income-tax Act, no penalty could be imposed for failure to file a return, provided that the return was filed before the assessment was made and the Income-tax Officer had completed the assessment on the basis of such return. The Calcutta High Court has examined the relevant provisions of the Income-tax Act in this connection in contradistinction to the provisions of section 10 of the èSuper Profits Tax Act. The same reasoning would apply to the present case also.
The Allahabad High Court has taken a similar view in the case of CIT v. Anchor Pressing (P.) Ltd. [1982] 136 ITR 505. The Allahabad High Court has interpreted the provisions of section 9 of the Companies (Profits) Surtax Act and has held that in section 9 levy of penalty has been provided only for failure to furnish a return without reasonable cause as required under section 5. If a return is filed under sub-section (3) of section 5 before the assessment is made, there will be no default and hence the Income-tax Officer is not entitled to impose any penalty under section 9. It has further observed that if the assessee files a return under section 5(3), it would also be a return required by the provision of section 5. Hence, the penal provisions of section 9 could not be attracted to such a case.
In the case of CIT v. Triveni Engineering Works Ltd. [1985] 154 ITR 561, the Delhi High Court has taken a similar view. The Delhi High Court also held that under section 9 of the Companies (Profits) Surtax Act, penalty could be imposed only for failure to file the return and not for late filing of the return. It also held that the Tribunal had accepted the assessees explanation for the late filing of the return and, hence, the case is concluded by a finding of fact.
In view of the above decisions and looking at the language of sections 5 and 9 of the Companies (Profits) Surtax Act, 1964, it is clear that in section 9 there is no provision for penalty for late filing of the return. So long as the return is filed under section 5(3) before the assessment is made and the assessment is on the basis of the return so filed, the penal provisions of section 9 are not attracted. We are, therefore, in respectful agreement with the observations made by the above three High Courts. No useful purpose would be served by allowing the Tribunal to raise the two questions and refer them to us.
The original petition is, therefore, dismissed.