Penalty for late return filing under income tax law remains valid where default is without reasonable cause, and interest is compensatory.

Penalty under section 271(1)(a) was sustainable where the return was not filed within time without reasonable cause, because the statutory discretion turns on the authority's satisfaction of default and no separate recording of additional reasons is required once that condition is met. Interest for delayed filing is compensatory, not punitive, so its levy does not bar penalty or create double punishment. The assessee's objections therefore failed and liability to penalty was affirmed.

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Issues: Whether penalty under section 271(1)(a) of the Income-tax Act, 1961 was leviable for failure to file the return within time, whether reasons were required to be recorded before imposing such penalty, and whether levy of interest barred penalty as a form of double punishment.

Analysis: The statutory scheme of section 271(1)(a) permits penalty where the authority is satisfied that the return was not furnished without reasonable cause. The discretion involved is confined to that statutory satisfaction and to the conditions prescribed by the provision; once default without reasonable cause is found, no further separate reasons are necessary for imposing penalty. The levy of interest for delayed filing is compensatory in character and is not a penalty. It is charged because delay in filing postpones assessment and tax realisation, whereas penalty is punitive and in terrorem. The two levies operate in different fields, so the coexistence of interest and penalty does not amount to double punishment.

Conclusion: The penalty was legally sustainable and the assessee's objections failed.

Final Conclusion: The reference was answered in favour of the Revenue and against the assessee, affirming liability to penalty under section 271(1)(a) of the Income-tax Act, 1961.

Ratio Decidendi: Where a return is not filed within the statutory time without reasonable cause, penalty under section 271(1)(a) is exigible on the authority's satisfaction of default, and interest charged for delay is compensatory rather than penal.

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