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TMI Blog1984 (11) TMI 170X X X X Extracts X X X X X X X X Extracts X X X X ..... 983 stating that, all facts relating to this mater were before the ITO at the time of the assessment; the non-charging of interest under s. 139(8) for belated submission of the return was not an omission but only the result of deliberate exercise of discretion on his part not to levy such interest in the exercise of the powers conferred upon him in the proviso to sub-s. (8) particularly in view of the waive of interest being well within his powers, considering that the interest chargeable was less than Rs. 1,000 and, therefore, there was no omission in this regard in the assessment which required to be rectified under s. 154. An alternative submission was also made, that the interest could be waived at that stage. The ITO declined to accept the above view of the matter. He held, that, the failure to charge interest in the assessment was a mere omission that happened due to inadvertence and nothing more could be read into that. He held, that the levy of interest under s. 139(8) was mandatory even when the time limit for the submission of return was extended beyond the due dates prescribed under the Act. and, therefore, interest under s. 139(8) was prima facie chargeable The question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee having satisfied the conditions prescribed in the Rule, merely because the ITO could waive interest upto Rs. 1,000 unilaterally without reference to a higher authority. In fine, he held that certain procedure has been prescribed under r. 117A and unless the same has been gone through, it cannot be held, that interest chargeable under this section should be presumed to have been waived even when such failure to charge interest was due to an inadvertent omission without any overtones about it. He relied on the Gujarat High Court s decision in CIT vs. Ramjibhai Hirjibhai Sons 1977 CTR (Guj) 2 : (1977) 110 ITR 411 (Guj) as the facts in that case were identical to the facts of the instant case and the Gujarat High Court held, that, there could be no presumption of waiver when the ITO merely on its to charge interest in the first instance. 4. Aggrieved with the same, the assessee is in appeal before us. Shri Thakar made the following submissions for our consideration. The assessee, no doubt, filed the return on 17th Nov., 1980 but, however, the same was preceded by an application in Form 6 for extension of time which was allowed by the ITO. Since the return was filed with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s decision in (1965) 57 ITR 149 (SC) was also considered and it was held by the Gujarat High Court, on absolutely identical facts and circumstances, that, action under s. 154 was available to the ITO when interest under s. 139(8) was originally omitted to be charged in the regular assessment. He also invited our attention to the decision of this Bench in I. T. A. No. 557 (Nag)/79 dated 5th Nov., 1980 in which similar action under s. 154 for charging interest under s. 154 (1A) omitted to be charged in the first instance, was upheld after with discussions of various decisions in this regard and a particular reference to the decision of the Gujarat High Court in 1977 CTR (Guj) 2 : (1977) 110 ITR 411 (Guj). Shri Thakar, in reply, submitted that when the time limit for submission of the return was extended by the ITO he had done so only after being satisfied about the genuineness of the request for extension and, therefore, it should be presumed, that the requirement of the residuary condition in r. 117A was satisfied in the present case and, therefore, the ITO should be presumed to have waive the interest in the first instance. 6. After a careful consideration of the facts and circ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of s. 183; (iii) where the return of income of a deceased individual is furnished by his legal representative and the legal representative satisfies the ITO that he had sufficient cause for not furnishing such return within time; (iv) where the return of income has been furnished in pursuance of a notice issued under s. 148; (v) any case in which the assessee produces evidence to the satisfaction of the ITO that he was prevented by sufficient cause from furnishing the rerun within time: Provided that the previous approval of the IAC has been obtained where the amount of interest reduced or waived, as the case may be, under cl. (iv) or cl. (v) exceeds one thousand rupees." It is nobody s case, that the assessee, in the present case satisfies the conditions at (i), (ii), (iii), (iv) of the above rule. Sub-r. (v) is residuary clause which enables the ITO to waive or reduce interest provided the assessee satisfied with evidence, that he was prevented by sufficient cause from furnishing the return within time. In the present case, there was absolutely no information or explanation in this regard at the time of the assessment whether the assessee was prevented by sufficient cau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ergence of judicial opinion as to whether or not interest was liveable in such a case and that, therefore, the provisions of s. 154 of the Act would not be applicable." In fact in the above decision their Lordships have mentioned, that, waiver is a separate proceeding and the assessee has to move the ITO to condone or waive penal interest. Their Lordships have also referred to the decision of the Supreme Court in (1965) 37 ITR 149 (SC) and distinguished the same. The facts in the present case are in all respects identical to those of the decided cases mentioned above. Moreover, this Bench in the earlier mentioned order, have held, that action under s. 154 was available to make good the omission to charge interest under s. 217(1A). In that decision there is an elaborate discussion relating to the various other decisions of the High Courts in this regard. There also, reliance has been placed on the decision of the Gujarat High Court in 1977 CTR (Guj) 2 : (1977) 110 ITR 411 (Guj). In that case, it was particularly mentioned, that since interest was a statutory levy, the omission to charge the same in the first instance, would amount to a statutory omission and, therefore, the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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