Self-assessment tax default period under section 140A(3) ends with regular assessment, requiring penalty recomputation.

For penalty under section 140A(3) of the Income-tax Act, the period of default in paying self-assessment tax runs from the date of filing of the return until the date of regular assessment and demand. After regular assessment is completed, any non-compliance with the fresh demand may attract consequences under other provisions, but not an extended default period for section 140A(3). The penalty must therefore be recomputed on the correct period of default, limited up to the date of regular assessment.

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Issues: Whether, for levy of penalty under section 140A(3) of the Income-tax Act, 1961, the period of default in paying self-assessment tax ends on the date of regular assessment and demand, or continues until the tax on the returned income is actually paid.

Analysis: The period of default for self-assessment tax was held to commence from the date of filing of the return and to end on the date when the regular assessment was made and demand was raised. Once regular assessment is completed, default in complying with that demand may attract penalty under other provisions, and the penalty levied under section 140A(3) is to be recomputed on the basis of the correct period of default.

Conclusion: The direction to restrict the period of default up to the date of regular assessment was upheld, and the penalty was required to be recomputed accordingly.

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