1980 (8) TMI 55 - HC - Income Tax

Summary

Issues:
- Assessment years 1968-69 and 1969-70
- Levying of interest for delayed filing of returns under section 139(1) of the Income Tax Act, 1961
- Dismissal of applications seeking cancellation of interest by the ITO and AAC
- Tribunal's decision on the leviability of interest under section 139(4)(a) of the Act
- Appeal against Tribunal's decision on questions of law regarding interest charges

Analysis:
The High Court judgment pertains to two Income Tax Cases for the assessment years 1968-69 and 1969-70. The returns for total income were filed after the due dates of 30th June 1968 and 30th June 1969, respectively, in response to a notice under section 148 of the Income Tax Act, 1961. The Income Tax Officer (ITO) levied interest for the delay in filing the returns from the respective commencement dates of the assessment years until the filing dates in March 1973.

The assessee subsequently filed applications seeking the cancellation of the interest levied by the ITO under section 154 of the Act. However, both applications were dismissed by the ITO and the appeals against these dismissals were also rejected by the Appellate Authority. The Tribunal, on appeal, held that as there was no order for an extension of the filing date by the ITO, and the returns were not filed within the periods specified in section 139(4)(a) of the Act, the interest was not leviable.

The Tribunal's decision raised questions of law regarding the leviability of interest under section 139(4)(a) of the Act. The Tribunal dismissed the revenue's application to refer these questions to the High Court, contending that the issue was not debatable and fell outside the scope of section 154 of the Income Tax Act, 1961. However, the High Court disagreed with the Tribunal's view, emphasizing that the question of whether interest is chargeable under section 139(1)(a) of the Act, even without an extension of time by the ITO, is indeed a legal matter.

Consequently, the High Court allowed the petitions and directed the Tribunal to refer the questions of law raised by the revenue to the court for its opinion in both cases. As there was no representation from the assessee's side, no costs were awarded. The judgment highlights the importance of legal clarity on the leviability of interest for delayed filing of income tax returns under the specified provisions of the Income Tax Act, 1961.