Notice under section 139(2) does not bar penalty for failure to file the return under section 139(1).

Issuance of a notice under section 139(2) does not, by itself, bar levy of penalty under section 271(1)(a) for failure to furnish the return under section 139(1). The Court followed its earlier view that the statutory default remains punishable where non-filing under section 139(1) is otherwise established, and the later notice does not nullify that default. The Tribunal was therefore found to be incorrect in holding that no penalty could be imposed, and the question was answered in favour of the Revenue and against the assessee.

---

---

Issues: Whether, once a notice under section 139(2) of the Income-tax Act, 1961 has been issued during the relevant assessment year, penalty can still be levied under section 271(1)(a) for failure to furnish the return under section 139(1).

Analysis: The Court followed its earlier view that issuance of notice under section 139(2) does not, by itself, prevent the imposition of penalty for default in furnishing the return under section 139(1). The question was answered in light of the settled position that penalty remains leviable on the facts found, and the existence of a notice under section 139(2) does not nullify the default under section 139(1).

Conclusion: The Tribunal was held to be incorrect in holding that no penalty could be imposed; the question was answered in favour of the Revenue and against the assessee.

Ratio Decidendi: A notice under section 139(2) does not bar penalty under section 271(1)(a) for failure to furnish the return under section 139(1), where the statutory default is otherwise established.

---