Belated return filing under section 139(4) does not cure default for penalty purposes under section 271(1)(a).

A return filed after the time allowed under section 139(1) or section 139(2), though within the extended period under section 139(4), does not count as timely for penalty purposes under section 271(1)(a). The court read the language of section 271(1)(a) in its ordinary sense and held that the saving facility in section 139(4) only permits a valid belated return before assessment; it does not remove the earlier default or extend the original time limit. The decision in Kulu Valley Transport Co. was confined to its own facts and did not govern this penalty issue, so the question was answered in favour of the Revenue.

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Issues: Whether a return filed after the time allowed under section 139(1) or section 139(2) but within the period permitted by section 139(4) is deemed to be filed within time so as to avoid penalty under section 271(1)(a) of the Income-tax Act, 1961.

Analysis: Section 139 contemplates returns at three stages: within the original time allowed under sub-section (1), within the time allowed on notice under sub-section (2), and, after default, within the further period permitted by sub-section (4) before assessment is made. The words in section 271(1)(a) referring to failure to furnish the return within the time allowed by section 139(1) or 139(2) were read in their ordinary and natural sense, and were held not to include the extended opportunity under section 139(4). The filing permitted by section 139(4) was treated as a saving provision giving the assessee an opportunity to make a valid return, but it did not erase the earlier default or render the statutory time limit under section 139(1) ineffective for penalty purposes. The decision in Kulu Valley Transport Co. was confined to its own context and did not control the interpretation of section 271(1)(a).

Conclusion: A return filed under section 139(4) after default under section 139(1) or 139(2) does not save the assessee from penalty under section 271(1)(a); the question was answered in favour of the Revenue.

Ratio Decidendi: The statutory opportunity to file a belated return before assessment under section 139(4) does not extend the time allowed under section 139(1) or section 139(2) for the purpose of penalty under section 271(1)(a).

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