Reassessment notice valid for failure to file return on time despite later filing facility under income-tax law

A return not filed within the time prescribed under section 139(2) constitutes a default that can attract reassessment under section 147(a), and the later facility under section 139(4) to file before assessment does not erase that default or curtail the Income-tax Officer's power to act on it. On that basis, a notice under section 148 issued for non-compliance with section 139(2) was treated as valid, and the return filed in response was accepted as filed pursuant to that notice.

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Issues: Whether a notice under section 148 of the Income-tax Act, 1961 could validly be issued on the footing that the assessee failed to file the return within the time prescribed under section 139(2), notwithstanding the further facility to file a return under section 139(4) before completion of assessment.

Analysis: Section 139(2) creates the primary obligation to file the return within the prescribed time, and default in complying with that obligation attracts section 147(a). The additional facility under section 139(4) is only a further privilege to file a return before completion of the assessment and does not wipe out the earlier default or take away the power of the Income-tax Officer to initiate reassessment on that default. On the facts, the notice under section 148 was therefore treated as properly issued and the return as having been filed in pursuance of that notice.

Conclusion: The challenge to the notice failed, and the issue was decided against the assessee and in favour of the Revenue.

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