9911796707
TMI Blog1975 (8) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... xtension of time to file return. These facts are not in dispute. Thereupon, the petitioner appeared on the 7th of October, 1971, before the respondent, Income-tax Officer, and the Income-tax Officer on the 15th of October, 1971, completed the assessments for the aforesaid two years under section 144 of the Income-tax Act, 1961, to the best of his judgment. In the said assessment orders, which are annexures to this petition, it has been stated by the Income-tax Officer that no return had been filed and no application was made for extension of time for filing returns. From the said assessment orders and demand notices it appeared that interest as contemplated under section 139 for late filing of the returns had been charged. The petitioner contends that the respondent, Income-tax Officer, was not entitled to levy or impose any interest under section 139 of the Income-tax Act, 1961, for late filing of returns. The relevant provision of section 139(1) of the Act at the material time stood as follows : " 139. Return of income.--(1) Every person, if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year excee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deducted at source, as the case may be. " It appears that as a result of the amendment by the Finance Act, 1972, the provisions of section 139 were altered after 1st of April, 1972. The said provisions were to the following effect : " 139. (1) Every person, if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax, shall furnish a return of his income or the income of such other person during the previous year in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed-- (a) in 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 four 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of clause (iii) of the proviso to sub-section (1) would be applicable. In the instant case before me it has to be noted that no return, even within the period of four years or prior to the making of assessment, was filed by the assessee. In the instant case, therefore, on the construction of the section, I am of the opinion that by virtue of the provisions of the statute as these were at the relevant time, in a case where the assessee had not applied for extension of time and there was no extension of time granted and where the assessee had not filed any return before the making of the assessment, interest as contemplated under sub-section (1) of section 139 of the Income-tax Act, 1961, cannot be charged. The position, however, is different since 1st of April, 1972. I am fortified in this view by the observations of the Division Bench of the Andhra Pradesh High Court in the case of Kishanlal v. Income-tax Officer [1971] 82 ITR 660 at page 662 (AP) of the report. Counsel for the revenue, however, drew my attention to the decision of the Gauhati High Court in the case of Ganesh Das Sreeram v. Income-tax Officer [1974] 93 ITR 19 (Gauhati). There the court observed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n having been filed before assessment within four years from the end of the assessment year 1961-62, as contemplated under section 139, sub-section (4), must be deemed to have been filed within the time allowed under section 22, sub-section (1) of the 1922 Act, and there was, accordingly, no default on the part of the assessee within the meaning of section 271(1)(a) of the 1961 Act, and set aside the order of penalty. On a reference at the instance of the Commissioner, it was contended for the assessee that sub-section (4) of section 139 was in the nature of a proviso to sub-section (1), that it had the effect of extending the time specified in section 139(1), that, therefore, if the assessee filed the return in conformity with section 139(4), he should be deemed to have filed the return within the time allowed under section 139(1) and section 271(1)(a) would not be attracted. The Division Bench of the Gujarat High Court disagreed with the Tribunal and rejected the contention of the assessee holding that the second clause of section 271(1)(a) applied where a person failed to furnish a return of income within the time allowed strictly under sub-section (1) or sub-section (2) of sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest which, again, was not by way of penalty but was by way of compensation for the delay in realisation of tax. As would be evident from the facts hereinbefore, that case was a case where the assessee had filed the return as contemplated under section 139(4) of the Act. That is not the case here. Reliance was also placed on the observations of the Andhra Pradesh High Court in the case of Poorna Biscuit Factory v. Commissioner of Income-tax [1975] 99 ITR 41 (AP). That case dealt with imposition of penalty. I am not concerned with that question in the instant case. Having regard to the view I have taken, I am of the opinion that prior to amendment with effect from 1st of April, 1972, the interest could not be charged in the case of an assessee who had not filed the return prior to the assessment and to whom no extension of time had been granted by the Income-tax Officer on an application made. That was a lacuna in the legislation as it stood. The position seems to have been rectified by the subsequent amendment as indicated by me. That is also an indication that at the relevant time the Income-tax Officer had no power to charge interest. In the aforesaid view of the matter, this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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