GARG AND COMPANY Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) At the instance of the assessee, Messrs Garg & Company, the income-tax Appellate Tribunal Delhi Bench *B' referred to this Court under section 256(1) of the Income-tax Act. 1961, the following questions :

(2.) The assessment year in question is 1962-63 corresponding to the previous year ending on March 31, 1962. The assessee is a registered firm carrying on business of building contractor. The due date for filing the return of income was November 30, 1962, but it was filed on February 14, 1966. There was, thus, a delay of 38 months. The Income-tax Officer charged interest under section 139(1) of the Act for the late filing of the return. The Appellate Assistant Commissioner confirmed the said order in appeal. Before the Income-tax Appellate Tribunal in second appeal, the assessee contended that interest could be charged if all the conditions mentioned in section 139(l)(iii) of the Income-tax Act, 1961 were satisfied. The return in the instant case was filed before the assessment was made under subsection (4) of section 139 and not within the period prescribed in clauses (a) or (b) of section 139(1) of the Act. No application for extension of time was filed and no extension had been granted by the Income-tax Officer- The liability to pay interest, contended the assessee, therefore, did not arise. It was also contended that there was no specific form of return prescribed under section 139(4) of the Act. The return that was filed was under section 139(1). The Revenue conceded the proposition that section 139(4) of the Act did not provide for 'any specific class of return' and that all returns filed under section 139(4) were in discharge of the obligation to file the return under section 139(1) and as such provisions of section 139(1) were applicable to the case. Referring to section 139(4), the Tribunal was of the opinion that it does not require an application to be made by an assessee for extension of time, and that if the assessce wanted to avail of the benefit of filing the return beyond the period provided for in clauses (a) or (b) of section 139(1), the provisions regarding payment of interest had to be applied. The Revenue was, therefore, held justified in charging interest for late filing of the return. The relevant portions of section 139 of the Income-tax Act, 1961, read as follows:

(3.) Mr. B- N. Kirpal, the learned counsel for the Revenue, contended that any person who has not furnished a return within the time allowd under sub-sections (1) or (2), but who furnishes the return in pursuance of sub-section (4) before the assessment is made, subjects himself to the provisions of clause (iii) of the proviso to sub-section. According to him, the only part of that provision, which is relevant in such a case and which will, therefore, be applicable, is the provision regarding the obligation of the assessee to pay interest at 9 per cent per annum ( up to the date of the furnishing of the return.