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TMI Blog1987 (10) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... ali year 1981 is the accounting year, the assessee filed return on 23rd Feb., 1983 though due on 30th June, 1982 admitting income of Rs. 1,04,560. This was accepted by the ITO in toto and the status was adopted as registered firm. While computing the tax, the ITO levied interest of Rs. 2906 under s. 139(8) of the IT Act, 1961. 3. The assessee disputed the levy of interest relying on the Full Bench decision of the Bombay High Court in the case of CIT vs. Daimler Benz A.G. (1977 CTR (Bom) 568 (FB) (1977) 108 ITR 961 Bombay High Court (FB). In that case the Bombay High Court held in connection with levy of penal interest under s. 18A(8) of the IT Act 1922 on a non-resident company that appeal was maintainable under s. 30(1) on a proper const ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could be imposed on the basis of tax payable as unregistered firm and not on the net amount of tax, if any, payable by it as a registered firm. Even if the tax payable by the registered firm was 'nil' still penalty was imposable on such firm treating it as unregistered firm. In other words, the tax payable treating the registered firm as unregistered firm was the basis for levy for penalty under s. 271(1)(a) and not the net tax payable by the registered firm as such. Reliance was also placed on the decision of the Calcutta High Court in the case of CIT vs. Priyal Gopal Bishoyee (1981) 20 CTR (Cal) 242 : (1981) 127 ITR 778 (Cal), which also related to levy of penalty under s. 271(1)(a) r/w s. 271(2) of the IT Act, 1961 for delay in filing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was accepted though the return was filed late. The tax payable was Rs. 12,204 and the advance tax paid by the assessee was Rs. 16,280 resulting in refund of Rs. 4076 on which interest under s. 214 was also paid by the Department. In the circumstances the appeal filed by the assessee was rightly entertained by the CIT(A) in view of the judgment of the Bombay High Court in the case of Daimler Benz, as that ratio would be squarely applicable to the assessee's case also. The Supreme Court in th case or Central Provinces Manganese Ore Co. Ltd. vs. CIT (1986) 58 CTR (SC) 112 : (1986) 160 ITR 961 (SC) held as under: "Interest is levied under s. 139(8) or s. 215 of the IT Act, 1961, because by reason of the omission or default mentioned in the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n stood as under: "Expln. 2: For the purposes of this sub-section where the assessee is a registered firm or an unregistered firm which has been assessed under cl. (b) of s. 183, 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." Reading s. 139(8)(a) with Expln. 2, it is clear that in case of a registered firm or unregistered firm assessed under s. 183(b) of the IT Act, 1961 as registered firm, 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 unregistered firm and this should be the basis on which interest under s. 139(8)(A) is leviable. In other words, the Explana ..... X X X X Extracts X X X X X X X X Extracts X X X X
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