1984 (6) TMI 95 - AT - Income Tax

Summary

Issues:
1. Charging of interest under s. 139(8) of the IT Act, 1961 for a late-filed return by a registered firm.
2. Proper computation of assessed tax and interest for a registered firm treated as an unregistered firm.
3. Validity of interest charged without a specific determination by the assessing officer.
4. Applicability of the decision of the Hon'ble Calcutta High Court in Mohanlal Soni vs. Union of India & Ors.
5. The right of the assessee to raise new points in a departmental appeal.

Detailed Analysis:
1. The case involved a controversy regarding the charging of interest under s. 139(8) of the IT Act, 1961, for a late-filed return by a registered firm. The assessing officer charged interest from the assessee, treating the firm as unregistered for the purpose of computing assessed tax and interest.

2. The assessee challenged the interest charge, arguing that they had reasonable cause for the delay in filing the return due to the extensive nature of their business operations. They contended that interest should be calculated based on the tax payable as a registered firm, citing relevant case law from the Karnataka High Court.

3. The CIT (A) accepted the second contention of the assessee and directed the assessing officer to charge interest based on the tax payable as a registered firm. However, the department appealed this decision, citing a contradictory judgment by the Calcutta High Court in Mohanlal Soni vs. Union of India & Ors.

4. The assessing officer's direction to charge interest without a specific determination was challenged by the assessee, arguing that such charging was invalid and not in accordance with the law. They relied on a judgment by the Calcutta High Court in CIT vs. Lalit Prasad Rohini Kumar to support their claim.

5. The ITAT considered the conflicting judgments and found that the interest to be charged for a registered firm should be computed based on the tax payable as an unregistered firm. However, they also noted that the assessing officer's direction to charge interest without proper consideration was invalid. The ITAT upheld the CIT (A)'s decision but on different grounds, allowing the assessee to defend the order on a point decided against them. The departmental appeal was dismissed, confirming the CIT (A)'s order.