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TMI Blog1985 (5) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment under section 143(3)/154 of the Act and found his total income at Rs. 91,451 computed as follows : (1) Share of profit from M/s. Ganeshdas Sreeram: Rs. (a) Business 80,291 (b) Property 10,183 -------------- 90,474 (2) Share of profit from M/s. A. V. Morello Co. 977 -------------- Total 91,451 A demand notice dated March 27, 1967, for payment of Rs. 51,246 as tax for the said assessment year 1962-63, including an amount of Rs. 6,031 as interest under section 139 of the Act, was issued. The petitioner filed a petition for waiver of the interest as provided under rule II 7A of the Income-tax (Second Amendment) Rules, 1964, which was rejected on May 30, 1969. The firm, M/s. Ganeshdas Sreeram, of which the peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been passed extending the time. As in the instant case neither was any application made to the Income-tax Officer nor any order extending the time was passed, the Income-tax Officer had no power to charge interest on the amount of tax and the demand made thereunder is without jurisdiction and it ought to be set aside. (ii) That the Income-tax Officer had no power to charge interest on the amount of tax in the hands of the partner of a registered firm. Since it is provided under sub-clause (a) of clause (iii) to the proviso of sub-section (1) of section 139 of the Act, that a registered firm shall be treated as an unregistered firm, and it gives power to the Income-tax Officer to charge interest on the firm alone and since the above provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1) and (2) furnishes his return for any previous year before the assessment is made at any time before the end of four assessment years from the end of the assessment year to which the return relates. To interpret the provisions of the sub-section as having application only in such cases where the assessee already applied for extension of time and the Income-tax Officer has granted the same will amount to " doing violence to the language used by the legislature ". The incorporation of the entire proviso to sub-section (1) in sub-section (4) or literal application of the entire proviso to cases coming under sub-section (4) is not possible and will make no sense. Hence, filing of an application for extension of time by the assessee and grant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een an unregistered firm. But, merely because the registered firm has been treated as an unregistered firm for the purposes of charging interest, the liability of the partner of the registered firm to be charged with interest on his share of income does not cease. It is only if the registered firm had been treated as an unregistered firm for assessment of tax under the Act that the liability of the partner to be assessed to tax would cease and not where it is only for the purpose of charging interest under section 139, that the registered firm is treated as an unregistered firm. For the purposes of assessment of tax under the Act, the registered firm continues to be treated as a registered firm and its partners continue to be similarly trea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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