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TMI Blog1986 (5) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... Division Bench judgments of the High Courts of Gujarat, Calcutta, Madhya Pradesh, Allahabad, Kerala, Karnataka and Rajasthan. With such a mass of judicial opinion and, indeed, if one may say so, a maze of precedents, it seems not only unnecessary but really wasteful to now launch on a fresh dissertation on principle. It would, therefore, be amply sufficient to broadly indicate the reasons for agreement with the one or the other stream of judicial thought. Inevitably one must now advert first, albeit briefly, to the matrix of facts giving rise to the question herein. Regretfully, it has to be noticed that we are yet dealing with a case in which the accounting year is one ending with Diwali on October 21, 1968. The assessee, under the law, was required to file the return for the assessment year in question by June 30, 1969. No return was filed by that date. On November 15, 1971, the Revenue issued a notice under section 139(2) of the Income-tax Act, 1961 (hereinafter to be referred to as the " Act "). In response to the notice, return was then filed on November 29, 1971. The Income-tax Officer, after assessing the tax liability of the assessee, imposed the statutory interest upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of every person whose total income, or the total income of any other person in respect of which he is assessable under this Act, includes any income from business or profession, before the expiry of six months from the end of the previous year or where there is more than one previous year, from the end of the previous year which expired last before the commencement of the assessment year, or before the 30th day of June of the assessment year, whichever is later ; (b) in the case of every other person, before the 30th day of June of the assessment year : Provided that, on an application made in the prescribed manner, the Income-tax Officer may, in his discretion extend the date for furnishing the return- (i) in the case of any person whose total income includes any income from business or profession the previous year in respect of which expired on or before the 31st day of December of the year immediately preceding the assessment year, and in the case of any person referred to in clause (b), up to a period not extending beyond the 30th day of September of the assessment year without charging any interest; (ii) in the case of any person whose total income includes any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the proviso to sub-section (1) of the said section that on an application made by the assessee in the prescribed manner, the Income-tax Officer may, in his discretion, extend the date for furnishing the return up to the 30th of September, or the 31st of December, as the case may be. If such date is extended on an application made by the assessee, no interest is to be charged up to the date of 30th of September, or the 31st of December, as the case may be. However, on an application made in the prescribed manner, the Income-tax Officer may also extend the date for furnishing the return beyond 30th September or 31st December; but if the date which is thus extended falls beyond these two termini, then interest at 9 per cent. per annum has to be paid. Clauses (i) and (ii) of the proviso deal with cases where no interest is chargeable. The primal benefit which the assessee gets is that by virtue of the application made by him, he avoids the payment of penalty and gets the convenience of extension without payment of interest. However, if the date which is thus extended falls beyond 30th of September or 31st of December, as the case may be, interest has to be paid at 9 per cent. per an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith effect from April 1, 1972. It is common ground before us that after the aforesaid amendment which came into effect from April 1, 1972, there is no scope for any controversy now of the type which has arisen betwixt the different High Courts for assessment years prior to these amendments. Not much light is thrown regarding the intention of the Legislature in inserting the new sub-section (8) of section 139 and the Notes on clauses which were circulated along with the Bill, which ultimately was enacted as the Amendment Act, do not give any clue as to the reasons why the Legislature enacted this provision of sub-section (8). To be somewhat more precise and for the sake of clarity, the salient features of the scheme of section 139 that emerge are (i) It is rested on the termini of the due dates prescribed for filing the returns by clauses (a) and (b) of sub-section (1) thereof. (ii) Clauses (i) and (ii) of the proviso to sub-section (1) confer the power of extending the prescribed time for filing the returns on the Income-tax Officer in his discretion without charging any interest up to the 30th day of September or the 31st day of December of the preceding assessment year, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we look at clause (iii) of the proviso to sub-section (1) of section 139, it is clear that even where the Income-tax Officer grants extension of time to a person to file his return of income, the person to whom extension of time is granted is liable to pay interest, if the extended date falls beyond a particular date. There is no question in such a case of levying any penalty on the person concerned, because extension of time having been granted to him, he is not in default. Interest is not charged to him by way of penalty but he is required to pay it, because by reason of extension of time, the filing of the return would be delayed and that would in its turn delay the assessment and consequent realisation of tax from the assessee. It is, therefore, by way of compensation for delay in realisation of tax that interest is required to be paid by the assessee. Now, obviously, if a person who obtains extension of time beyond a certain date is required to pay interest, a person who does not seek extension of time but files the return of income under sub-section (4) of section 139 after the time specified in sub-section (1) of section 139 cannot be allowed to escape payment of interest. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese two judgments were followed by the Jammu and Kashmir High Court in Mulakh Raj Bimal Kumar v. ITO [1977] 107 ITR 382. Equally the Patna High Court in Bahri Brothers' case [1976] 102 ITR 443 had followed the same. It thus seems plain that the contrary opinion seems to be primarily rested on and, to my mind, basically influenced by the earliest judgment of the Andhra Pradesh High Court (at least the one brought to our notice) in Kishanlal Haricharan v. ITO [1971] 82 ITR 660 (AP). Now, it is patent that the foundational base of the aforesaid view has been knocked out by the subsequent overruling of the judgment in Kishanlal Haricharan v. ITO [1971] 82 ITR 660 (AP), by the later Full Bench of the Andhra Pradesh High Court itself in ITO v. Secunderabad Tin Industries [1978] 113 ITR 1. The exhaustive judgment therein is tribute to itself and it is unnecessary to advert to it in any greater detail than by saying that we are entirely in agreement therewith. Entirely in line therewith is the view of the Full Bench of the Gauhati High Court in Shankarlall Goenka v. ITO [1979] 119 ITR 229. There is then a spate of other Division Bench authorities taking the identical view in Chhotalal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did not give any inkling of the object and reasons therefor. The reverse is perhaps true that the earlier law may give a clue to the subsequent changes made therein and the reasons therefor, as is manifest from the celebrated dictum in Heydon's case [1584] 3 Co. Rep. 7a, but the converse that the subsequent amendment gives the clue to the interpretation cannot easily hold water. Even a close perusal of sub-section (8) which has been later substituted is in no way indicative of or helpful for the interpretation of the earlier provisions and, in particular, of the other sub-sections. Equally the view in Bahri Brothers' case [1976] 102 ITR 443 (Pat), now runs counter to the massive weight of precedent. This judgment has been expressly noticed and dissented from in Secunderabad Tin Industries' case [1978] 113 ITR 1 (AP), Jagdish Rice Mills v. CIT [1978] 114 ITR 817 (MP), Shankarlall Goenka v. ITO [1979] 119 ITR 229 (Gauhati), CIT v. Tikam Chand Agarwal [1979] 119 ITR 248 (All), CIT v. Dina Nath Kathoria [1984] 149 ITR 60 (Cal) and Roop Narain Contractor v. Addl. CIT [1985] 153 ITR 670 (Raj). With the greatest respect, therefore, this judgment does not lay down the law correctly and is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , by which clause (a) of sub-section (8) of section 139 of the Income-tax Act, 1961, was substituted and corresponding changes made in both sub-sections (1) and (2) of that section and the matter in controversy in the instant case in all its ramifications, I am constrained to hold that the view taken by the learned Chief justice can be the only view possible. It is true that the Division Bench of this court in CIT v. Bahri Bros. (P.) Ltd. [1976] 102 ITR 443 placed reliance on a decision of the Division Bench of the Andhra Pradesh High Court in the case of Kishanlal Haricharan v. ITO [1971] 82 ITR 660. Learned counsel for the Revenue cannot be blamed in any manner whatsoever for not pointing out to this court that the decision of the Division Bench of the Andhra Pradesh High Court referred to above was overruled by the Full Bench judgment of the said High Court in the case of ITO v. Secunderabad Tin Industries [1978] 113 ITR 1, and the judgment of the Full Bench of the Andhra Pradesh High Court, was delivered on July 20, 1977, while this court had decided the case of Bahri Bros. [1976] 102 ITR 443 much earlier on November 19, 1974, at which point of time the Fall Bench judgment of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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