9911796707
TMI Blog1989 (7) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessment year involved is 1985-86, relevant to previous year ended on 31-12-1984. 3. During the year under consideration the respondent earned share income amounting to Rs. 8,70,279 from registered firm of M/s. Cadila Distributors returned net loss amounting to Rs. 6,95,422 from its solo proprietorship business carried on in the name of M/s. Rachem. The return was due on 30-6-1985 but the same was filed on 27-9-1985 at the total income of Rs. 1,74,860. 4. At the assessment proceedings the respondent claimed assessment in the status of 'individual', but the ITO it in the status of Association of Persons (AOP). While completing the assessment under section 143(3) of the Act the ITO charged interest under section "139(8) and 217 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned CIT(A) has cancelled such charge mainly on two grounds. In the first place he observed that the ITO, had led no evidence to show that interest under section 139(8) was chargeable in this case and secondly that in view of the adverse condition of law and order in the State of Gujarat at the relevant time the Central Board of Direct Taxes (Board) had advised the field officers not to take penal actions in the matters of late filing of returns or payments of advance taxes. The contention of Mr. M.P. Patel the learned DR, is that the learned CIT(A) has gone by irrelevant considerations in cancelling the charge of interest under section 139(8). According to Mr. Deodhar the facts of the case were crystal clear in as much as that the return h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the ITO and therefore the learned CIT(A) was fully justified in cancelling the charge. It was again emphasised by the learned counsel that opportunity of being heard should given to an assessee before levy of charge and that on his showing reasonable cause in not complying with some statutory directions in the discharge of his obligation he should not be burdened with any charge of interest under section 139(8) of the Act. In this behalf Mr. Patel relied upon the decisions of the Supreme Court in the case of CIT v. Kanpur Coal Syndicate [1964] 53 ITR 225 and of the Rajasthan High Court in the case of CIT v. Devichand Pan Mal [1986] 160 ITR 545. 9. After having heard the rival submissions of the learned counsel for the parties we are o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether or not the Income-tax 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..........". The plain language of section 139(8) thus clearly suggests that irrespective of the fact whether the date of filing return has or has not been extended in a given case, the assessee shall be liable to pay, simple interest and the logic behind such direction is not difficult to understand. In the first plage, as stated above, interest is not penal but simply compensatory in nature. Secondly the assessee has been given a right to seek reduction or waiver of such interest if certain conditions as provided by the Proviso to section 139(8) and Rule 117A of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would certainly lie in such cases but for the relief of reduction in or waiver of the amount of charge or the assessee shall have to go to the ITO. It is not onerous upon him. It is rather beneficial to his interest. Reduction or waiver proceedings may give him another right of appeal to place his grievance before higher authorities. " 13. The doctrine of 'reasonable cause' which enumerates the principle of natural justice, has not bow cut short in size by section 139(8). The words 'whether or not the Income-tax Officer has excluded the date for furnishing the return', occurring in the language of section 139(8) we subject to the mandate contained in the proviso to that sub-section. That position clearly suggests that the 'reasonable cau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondents' side was or were looking after the affairs of the partnership business, Mr. Patel could make no answer. It was not denied before us that one or more of respondents must have certainly been actively engaged in carrying out the partnership business and therefore, they would have naturally been in the know of the likely share income of the respondent. And the income was not negligible. It was near about 9 lakhs falling to the share of the respondent the payment of taxes under section 140A in time and the filing of estimate in subsequent year, considered sufficient by the learned CIT(A) for ignoring the mistake committed by the respondent are hardly convincing. Once active participation and involvement of respondent in the income ear ..... X X X X Extracts X X X X X X X X Extracts X X X X
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