Decision of Madras High Court. - Income Tax - 477/CBDT

INSTRUCTION NO. 477/CBDT November 21, 1972 Section(s) Referred: 139(8) Statute: Income - Tax Act, 1961 Attention is invited to Madras High Court's decision dated 15-7-1972 on the writ petitions filed by the above-noted three registered firms. The Court while allowing the writ petitions, held that in interpreting proviso (iii)(b) to sub-section (1) of Section 139, the amount of advance tax should be deducted in arriving at the quantum of tax on which interest is to be charged for late filing of returns, not only in the case of other assessees but also in the case of registered firms. A copy of the judgment is attached. 2. Madras High Court's decision was based on the provisions as they stood before the Taxation laws (Amendment) Act, 1970. According to new sub-section (8) to Section 139 substituted by Taxation laws(Amendment) Act, 1970, the advance tax paid by the registered firm is clearly eligible for deduction in computing the quantum of tax on which interest is to be charged. The position was not clear before the amendment. 3. Board have accepted the above decision of the High Court and have decided that the law laid down therein should be applied to all pending proceedings. Relief where sought for within the frame work of law, in respect of completed proceedings may be allowed. 4. The instructions may be brought to the notice of all the Officers concerned.