Penalty for failure to file returns can extend to reassessment proceedings where the original default predates the new Act.

Section 271(1)(a) was construed as permitting penalty for failure to file returns required under section 139(1), section 139(2), or section 148, and the words "as the case may be" did not confine penalty only to default in response to reassessment notices. Reading sections 271(1) and 297(2)(g) together, the Gujarat HC stated that penalty provisions of the new Act apply to proceedings completed after 1 April 1962. On that basis, the Income-tax Officer could in reassessment proceedings take cognizance of the assessee's earlier default under section 22(1) of the 1922 Act and levy penalty accordingly.

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Issues: Whether penalty under section 271(1)(a) of the Income-tax Act, 1961 could be imposed in reassessment proceedings under sections 147 and 148 for the assessee's original default in not filing returns under section 22(1) of the Indian Income-tax Act, 1922.

Analysis: The issue turned on the construction of section 271(1)(a), particularly the effect of the words "as the case may be" and whether they confined penalty only to default in complying with a notice issued in reassessment proceedings. The Court held that the provision covers defaults in filing returns required under section 139(1), section 139(2), or section 148, and that the added words do not alter the position that existed under the old Act. Reading sections 271(1) and 297(2)(g) together, and applying the principle that the penalty provisions of the new Act govern proceedings completed after 1 April 1962, the Court concluded that the Income-tax Officer could take cognizance in reassessment proceedings of the earlier default under section 22(1) and impose penalty accordingly.

Conclusion: Penalty was legally leviable in reassessment proceedings for the assessee's original default in not filing the return, and the answer to the referred question was in the affirmative against the assessee.

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