783/CBDT. - Income Tax - 783/CBDT

INSTRUCTION NO. 783/CBDT Dated : November 6, 1974 Section(s) Referred: 139(8) Statute: Income - Tax Act, 1961 Reference is invited to Board's instruction contained in their letter F.No.58/104/67-IT(Inv) dated 1.1.68 and to say that the question of levy of interest under section 139(8) read with section 139(1) of the IT Act, 1961 in the case of a Registered Firm has been re-examined. Explanation 2 of clause (a) of sub-section(8) of section 139(2) is quite explicit and clearly lays down that for the purpose of levy of interest where the assessee is a registered firm or an unregistered firm assessed under section 183(b), the tax payable on the total income shall be the amount of tax which would have been payable if the firm had been assessed as an unregistered firm. 2. It follows therefore that even where the assessment of a Registered firm or an unregistered firm assessed under section 183(b) is made on total income below the minimum not liable to tax, interest under section 139(8) will nevertheless be chargeable on the tax which would have been payable if the firm had been assessed as an unregistered firm. 3. The Board's circular letter F.No.58/104/67-IT(Inv) dated 1.1.68 is modified to this extent. This may be brought to the notice of all officers in each charge.