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Issues:
1. Justifiability of delay in filing a valid return and waiver of interest under section 139(8) of the IT Act, 1961. Analysis: The appeal was filed by the Revenue against the order of the CIT (A), Ahmedabad, challenging the waiver of interest chargeable under section 139(8) of the IT Act, 1961. The original return of income was filed on 30th June 1977, and tax under section 140A amounting to Rs. 5,933 was paid on 23rd June 1977. However, the ITO issued a notice under section 143(2) on 31st August 1978, and subsequently found that the return was not signed by a partner but by the Manager of the firm. A fresh return of income was filed on 31st March 1980, which was considered as the date of filing the return by the ITO, leading to the charging of interest under section 139(8). Upon appeal, the CIT (A) deleted the interest charged by the ITO, citing sufficient justification for the delay in filing a valid return on 31st March 1980. The CIT (A) also rejected the argument based on section 292(B) of the Act regarding the validity of the return of income. During the hearing, the departmental representative contended that no appeal was provided for the charge of interest under section 139(8), and the deletion of interest was not justified, especially when the amount exceeded Rs. 1,000, requiring IAC's permission. The counsel for the assessee supported the appeal against the interest charged under section 139(8), referencing decisions from the Calcutta High Court and the Supreme Court. The ITAT considered the compensatory nature of interest under section 139(8) and emphasized that the power to charge interest does not mandate its imposition. The ITAT upheld the CIT (A)'s decision, highlighting the lack of proper reasoning by the ITO in invoking the interest charge and the discretion of the CIT (A) to delete the interest under rule 117A. The ITAT dismissed the appeal, affirming the CIT (A)'s order in its entirety.
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