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Interpretation of section 139(2) of the Income-tax Act, 1961 regarding charging interest for late filing of return without application for extension of time. Analysis: The case involved a reference under section 256(1) of the Income-tax Act, 1961, regarding the question of whether interest could be charged under section 139(2) if the application for extension of time is not made by the assessee. The assessee, a company, failed to file the return within the specified time and later filed it after a notice was served. The Income-tax Officer charged interest for the late filing, which was contested by the assessee. The Appellate Assistant Commissioner agreed with the assessee, leading to an appeal by the revenue before the Tribunal. The Tribunal determined that interest was charged under section 139(2) due to the late filing without an application for extension of time. It held that interest would only be charged if an application was made for an extension, as per the provisions of section 139(2). The High Court analyzed the provisions of section 139(2) and the conditions under which interest can be charged for late filing of returns. It noted that the discretion to extend the date for filing a return lies with the Income-tax Officer if an application is made in the prescribed manner. The Court emphasized that the provisions of sub-clause (iii) of the proviso to section 139(1) would apply only if the conditions of the proviso to sub-section (2) are fulfilled. As the assessee did not apply for an extension in the prescribed manner, the proviso to section 139(2) was not attracted, and therefore, the Tribunal rightly upheld the deletion of interest by the Appellate Assistant Commissioner. The judgment referred to various case laws to support the interpretation of the provisions under consideration. It cited cases where interest was held payable when the return was filed late without obtaining an extension of time, emphasizing the importance of requesting an extension for submitting the return to trigger the provisions for charging interest. The Court also highlighted legislative amendments that clarified the chargeability of interest for delays in filing returns, irrespective of whether the Income-tax Officer extended the time for filing. Ultimately, the Court answered the question in the negative, in favor of the assessee, as interest could not be charged under section 139(2) in the absence of an application for extension of time.
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