9911796707
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Issues:
1. Charging of interest under sections 139(8) and 217 without a speaking order. 2. Reasonable cause for late filing of return due to a search conducted by the department. 3. Application for reduction or waiver of interest under rules 40 and 117A. Analysis: 1. The appeal raised concerns about the incorrect rejection by the CIT (A) of the grounds related to the charging of interest under sections 139(8) and 217 without a proper order and discretion exercised by the ITO. The assessee argued that interest was imposed without a speaking order and without considering the discretion vested in the ITO under rules 40 and 117A of the IT Rules, 1962. The status of the assessee as an URF for section 139(8) purposes was also questioned. 2. The facts of the case revolved around the assessment year 1977-78, where the return of income was filed late on 6th Oct., 1979, instead of the due date of 30th June, 1977. The ITO calculated interest under sections 139(8)(a) and 215(c) due to the tax paid by the assessee being less than 75% of the tax assessed upon completion of the assessment. 3. The appeal before the CIT (A) contended that a reasonable cause for the delayed filing existed due to a search conducted on the business and residential premises of the assessee, resulting in the seizure of books of accounts. Although the CIT (A) did not accept this argument, it was acknowledged that the income of the assessee had decreased, leading to the allowance of relief under sections 139(8)(b) and 215 by the ITO. The assessee, still dissatisfied, appealed further. 4. During the appeal, the counsel for the assessee highlighted the dropped penalty proceedings for the previous assessment year and argued for a reduction or waiver of interest under section 139 based on sufficient cause for the delay in filing the return. The sequence of events, including hospitalization and death of the accountant, search dates, and extension requests, was presented as supporting evidence. 5. The departmental representative relied on the IT Authorities' orders, emphasizing the necessity of charging interest under section 139(8) for late returns. The absence of a formal request for interest waiver was pointed out as a reason for the assessee's inability to claim such relief. 6. After considering both sides, the Tribunal observed that the cancellation of penalty for late filing by the CIT (A) indicated a sufficient cause for the delay, allowing for the reduction or waiver of interest under section 139(8). Despite no separate request for waiver, the ITO had the authority, as per the proviso to section 139(8), to reduce or waive interest under circumstances specified in rule 117A. Therefore, the technicality raised by the departmental representative was deemed insufficient to deny the assessee's claim, leading to a decision in favor of the assessee. 7. Consequently, the appeal was allowed, and the interest under section 139(8) was ordered to be completely waived in this case.
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