1990 (8) TMI 13 - HC - Income Tax

Summary

Issues:
1. Whether interest under section 139(8) of the Income-tax Act can be charged in respect of an assessment made under section 147 of the Income-tax Act.

Analysis:
The case pertains to the assessment year 1980-81 and revolves around the question of charging interest under section 139(8) of the Income-tax Act for an assessment made under section 147. The assessee, a registered firm, filed its return under section 148, and interest was charged under section 139(8) by treating the firm as unregistered. The Commissioner of Income-tax (Appeals) allowed the appeal, stating interest could only be charged on regular assessments, not on assessments under section 147. The Tribunal, considering relevant case law, held that no interest under section 139(8) could be levied for assessments under section 147. The main issue was whether interest under section 139(8) is applicable to assessments made under section 147.

The court noted that the amendment to section 139(8) by the Taxation Laws (Amendment) Act, 1984, clarified that assessments under section 147 should be considered regular assessments for the purpose of charging interest. However, this amendment was not applicable to the assessment year in question. Referring to the Supreme Court's decision in Central Provinces Manganese Ore Co. Ltd. v. CIT, the court emphasized that interest is a part of the assessment process, with the condition that it should be a regular assessment. The court interpreted "regular assessment" as assessments under section 143 or 144, as defined in section 2(40). Assessments under section 143(3) read with section 147 were considered not eligible for interest under section 139(8).

The court cited judgments from other High Courts, such as the Patna High Court and the Andhra Pradesh High Court, which held similar views that assessments under section 143(3) read with section 147 do not qualify as regular assessments for charging interest under section 139(8). Based on the consistent judicial interpretation, the court concluded that interest under section 139(8) cannot be levied for assessments made under section 147. The question was answered in favor of the assessee and against the Revenue, with no order as to costs. Both judges concurred with the decision.