Return filing default under section 139(1) persists despite later notice or belated filing; penalty and notice remain valid absent prejudice.

A return default under section 139(1) remains complete once the return is not filed within the prescribed time, and later filing in response to a notice under section 139(2) or within section 139(4) does not wipe out that breach for penalty under section 271(1)(a). The issuance of a section 139(2) notice does not condone the earlier default or stop its continuance, so penalty remains leviable. Penalty notices and orders are not invalid merely because they lack further particulars or mention the wrong provision, where they sufficiently inform the assessee of the default and no prejudice is shown.

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Issues: (i) Whether penalty under section 271(1)(a) of the Income-tax Act, 1961 could be levied where the assessee filed the return only after a notice under section 139(2) or within the extended time under section 139(4), and whether the default under section 139(1) ceased on issuance of the notice under section 139(2). (ii) Whether the penalty notices and penalty orders were invalid for want of specific particulars or for mentioning the wrong provision in the notices.

Issue (i): Whether penalty under section 271(1)(a) of the Income-tax Act, 1961 could be levied where the assessee filed the return only after a notice under section 139(2) or within the extended time under section 139(4), and whether the default under section 139(1) ceased on issuance of the notice under section 139(2).

Analysis: The default contemplated by section 139(1) is complete once the return is not filed within the prescribed time. Issuance of a notice under section 139(2) does not condone that default or arrest its continuance. The return filed in response to section 139(2), or later under section 139(4), does not erase the earlier breach for purposes of penalty under section 271(1)(a). The statutory scheme would be defeated if non-filing under section 139(1) could escape penalty merely because a notice under section 139(2) was later issued.

Conclusion: The penalty was validly leviable, and the issue was decided against the assessee and in favour of the Revenue.

Issue (ii): Whether the penalty notices and penalty orders were invalid for want of specific particulars or for mentioning the wrong provision in the notices.

Analysis: The notices sufficiently indicated that the proposed penalty proceedings were for failure to furnish the return within the time allowed under section 139(1). The assessee knew the relevant dates and the basis of the proceedings, and no prejudice was shown from the manner in which the notices were framed. Mere absence of additional particulars did not invalidate the proceedings where the assessee had effective opportunity to reply.

Conclusion: The notices and penalty orders were not invalid on this ground, and the issue was decided against the assessee and in favour of the Revenue.

Final Conclusion: The assessee remained liable to penalty for the delayed returns, and the reference was answered in favour of the Revenue on the substantive issues decided.

Ratio Decidendi: A default in filing a return under section 139(1) continues until the return is actually filed and is not wiped out or condoned by the issuance of notice under section 139(2) or by filing within section 139(4); a penalty notice is not invalid if it sufficiently apprises the assessee of the default and no prejudice is shown.

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