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TMI Blog1996 (4) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... g the penal interest imposed by the Income-tax Officer under section 139(8) of the Income-tax Act, 1961 ? 2. Whether the charging of interest on account of delay in filing the return under section 139(8) of the Income-tax Act which is in the nature of compensation is illegal if no show-cause is given ? 3. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in not remanding the case regarding the charging of interest to the Commissioner of Income-tax (Appeals) for consideration of the matter afresh after giving reasonable opportunity to the assessee as has been done in the case in S. Govindaraju v. CIT [1982] 138 ITR 495 (Kar) if the answer of question No. 2 is against the Revenue ? " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . As the return had not been filed within the time allowed under section 139(1), the Inspecting Assistant Commissioner (Assessment) charged interest of Rs. 75,237 under section 139(8) for the late filing of the return. Being aggrieved by this order of the Inspecting Assistant Commissioner (Assessment), the assessee preferred an appeal before the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals) cancelled the interest on the ground that the assessee was prevented by sufficient cause from furnishing the return earlier. Being aggrieved by the order of the Commissioner of Income-tax (Appeals), the Department filed an appeal before the Income-tax Appellate Tribunal. The contention of the Department in that appeal w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anding that the date is so extended, interest shall be chargeable in accordance with the provisions of sub-section (8)(a) : " Where the return under sub-section (1) or sub-section (2) or sub-section (4) for an assessment year is furnished after the specified date, or is not furnished, then whether or not the Assessing Officer has extended the date for furnishing the return under sub-section (1) or sub-section (2), the assessee shall be liable to pay simple interest at fifteen per cent. per annum, reckoned from the day immediately following the specified date to the date of the furnishing of the return, or, where no return has been furnished, the date of completion of the assessment under section 144, on the amount of the tax payable on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Supreme Court has observed as under (page 966): " Now, the question is whether orders levying interest under sub-section (8) of section 139 and under section 215 are appealable under section 246 of the Income-tax Act. Clause (c) of section 246 provides an appeal against an order where the assessee denies his liability to be assessed under the Act or against any assessment order under sub-section (3) of section 143 or section 144, where the assessee objects to the amount of income assessed or to the amount of tax determined or to the amount of loss computed or to the status under which he is assessed. Inasmuch as the levy of interest is a part of the process of assessment, it is open to an assessee to dispute the levy in appeal provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -tax, the appellate authority as well as the Tribunal are quite competent in law to cancel the interest imposed under section 139(8) of the Act. The question then arises whether the penal interest has been rightly deleted. Sub-section (8) of section 139 provides that interest could be levied where the return is furnished after the specified date whether or not the Income-tax Officer has extended the date for furnishing the return. That being so merely extending time for furnishing a return by filing Form No. 6 will itself not amount to grant of waiver or deletion of interest on the ground that there were sufficient cause for the same. Though at the time when the extension is granted by the officer, it can be said that he exercised his disc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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