Penalty for delayed return fails where no return was filed by the assessee, but advance tax estimate penalty survives on the facts found.

Penalty under section 271(1)(a) was unsustainable because the return and revised returns on record had been filed by the firm through a partner, not by the Hindu undivided family assessed as the assessee; the order wrongly treated another entity's return as the assessee's delayed return, so the penalty for late filing was set aside. Penalty under section 273 was sustainable because, on the facts found, the assessees for the relevant period had filed no return before or after the 1961 Act came into force, and the statutory obligation to file an advance tax estimate therefore remained; the reference to section 18A(2) of the 1922 Act was only a typographical error and caused no prejudice.

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Issues: (i) Whether the penalty under section 271(1)(a) of the Income-tax Act, 1961, for delayed filing of return was sustainable when the returns on record were filed by the firm and not by the Hindu undivided family assessed as the assessee; (ii) Whether the penalty under section 273 of the Income-tax Act, 1961, for failure to file an advance tax estimate was sustainable in the circumstances of the case.

Issue (i): Whether the penalty under section 271(1)(a) of the Income-tax Act, 1961, for delayed filing of return was sustainable when the returns on record were filed by the firm and not by the Hindu undivided family assessed as the assessee.

Analysis: The return and the so-called revised returns were found to have been filed on behalf of the firm through a partner. No return, original or revised, had been filed by the Hindu undivided family that was treated as the assessee for the relevant period. On that footing, the case was not one of late filing of a return within time but one of failure to furnish a return by the assessee. The penalty order proceeded on an erroneous basis by treating the firm's return as the family's voluntary return and by imposing penalty for delay rather than for non-furnishing.

Conclusion: The penalty under section 271(1)(a) was unsustainable and was set aside in favour of the assessee.

Issue (ii): Whether the penalty under section 273 of the Income-tax Act, 1961, for failure to file an advance tax estimate was sustainable in the circumstances of the case.

Analysis: The challenge to this penalty failed because, on the facts found, the heirs and legal representatives were the assessees for the relevant period and no return had been filed by them either before or after the 1961 Act came into force. In that situation, the obligation to file an estimate and pay advance tax could not be avoided. The reference in the penalty order to section 18A(2) of the 1922 Act was treated as an obvious typographical error that caused no prejudice.

Conclusion: The penalty under section 273 was valid and was sustained against the assessee.

Final Conclusion: The writ petition succeeded only in respect of the penalty for delayed filing of the return and failed in respect of the penalty for non-filing of advance tax estimate; the matter was disposed of by partial relief to the assessee.

Ratio Decidendi: A penalty for delay in filing a return cannot stand where the assessee never filed any return at all and the impugned order proceeds on treating another entity's return as the assessee's return, but a penalty for failure to file an advance tax estimate remains sustainable where the statutory obligation attached to the assessee on the facts found.

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