9911796707
TMI Blog1979 (9) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... ar 1974-75, regular assessment was made. In addition, the ITO raised a further demand on account of interest under s. 139(8) of the Act treating the petitioner firm as unregistered for the reason that whereas the return was due to be filed by the petitioner on 30th June, 1974, under s. 139(1) of the Act, it was actually filed on 13th September, 1974. Assessee's application for the waiver of interest was rejected by the ITO. Its revision before the Commissioner of Income-tax was also dissmissed. The said orders of the I.T. authorities are sought to be impugned in this petition on the sole ground that Expln. 2 to sub-s. (8) of s. 139 of the Act is ultra vires art. 14 of the Constitution. The provisions of sub-s (8) of s. 139 of the Act are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessment year, or the 30th day of June of the assessment year, whichever is later ; (b) in the case of every other assessee, the 30th day of June of the assessment year. Explanation (2).--For the purposes of this sub-section, where the assessee is a registered firm or an unregistered firm which has been assessed under clause (b) of section 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. (b) Where as a result of an order under section 154 or section 155 or section 250 or section 254 or section 260 or section 262 or section 264, the amount of tax on which interest was payable under this sub-section has been reduced, the interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad been assessed as an unregistered firm. Similarly, the analogous provisions as regards the penalties have been provided for under s. 271 of the Act, and in view of the provisions of sub-s. (2) of s. 271 of the Act, when the person liable to penalties is a registered firm or an unregistered firm which has been assessed under cl. (b) of s. 183, then, notwithstanding anything contained in the other provisions of this Act, the penalty imposable under sub-s. (1) shall be the same amount as would be imposable on that firm if that firm were an unregistered firm. The provisions of sub-s. (2) of s. 271 of the Act were the subject-matter of attack before their Lordships of the Supreme Court in Jain Brothers v. Union of India [1970] 77 ITR 107, wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... racted the payment of interest on the amount of tax which was due and which was not paid in time. It is no doubt true that the provisions of sub-s. (8) of s. 139 of the Act are compensatory in nature as the said provisions have been enacted on the principle that the revenue should not suffer the loss for the default of the assessee for not filing the return in time and thereby evading the payment of the tax for the time being and thus the revenue has been held entitled to receive simple interest at the rate of twelve per cent. per annum for the period during, which the revenue was deprived of the payment of tax, which had become due and on the amount of tax payable on the total income as determined on regular assessment but that will not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in a more advantageous position than an individual who has other sources of income. These observations are clearly against the various provisions of the Act. As is clear, the exemption limit is higher in the case of a registered firm. The tax of a registered firm is also at a lower slab. Their Lordships also observed in Jain Brothers' case [1970] 77 ITR 107 (SC) that the legislature did give the benefit of reduced rate to the registered firm and thus the conclusions arrived at by the learned judge in M. Nagappa's case [1975] 99 ITR 32 (Kar) are against the provisions of the statute and the dictum laid down by their Lordships of the Supreme Court. The Gujarat High Court in Chhotalal Co. v. ITO [1976] 105 ITR 230 upheld the vires of Expln ..... X X X X Extracts X X X X X X X X Extracts X X X X
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