KOIPALLY BROTHERS Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) In the case of a person who has not furnished return within time allowed to him under sub-s.(1) or (2) of S.139 of the Income Tax Act, if he furnished the return subsequently before the end of the period specified in clause (b) of S.139 (4) of the Income Tax Act is he liable to pay the interest contemplated by sub clause (iii) of the proviso to sub-s.(1) of S.139 of the Act This is the question that arises for decision in this case. On this question different views have been expressed by the High Courts in India.

(2.) The petitioner in this case is a firm. It is an assessee to income tax. The petitioner filed his return of Income for the assessment year 1968-69 only on 28-6-1969 though it was due on 30-6-1968. That there was delay in filing the return was not noticed at the time of assessment for the assessment year 1968-'69. Later it was noticed by the Commissioner of Income Tax who took up suo motu revision. He held that the assessment was erroneous in so far as the assessing authority had failed to levy interest under S.139 of the Act, and therefore the matter was remitted to the Income tax officer to enable him to deal with the case in regard to the levy of interest. Pursuant to this the Income Tax Officer passed Ext. P-3 order on 26-2-1973. In this he held that the return that ought to have been filed on 30-6-1968 was filed only on 28-6-1969 and there was no sufficient reason for the late filing of the return. Hence he levied interest of Rs. 6515 under S.139(1)(iii) of the Act. The petitioner took up the matter in appeal before the Appellate Assistant Commissioner of Income tax The latter allowed the appeal. This was reversed by the Income Tax Appellate Tribunal, Cochin Bench before whom the Department took up the matter in further appeal. The reversal of the appeal was on the ground that the Appellate Assistant Commissioner had no jurisdiction to entertain the appeal against the levy of interest. The petitioner has challenged Ext. P-3 order before this Court in these proceedings.

(3.) That the petitioner was bound to file return under S.139(1) in this case is not disputed. But he did not file the return. He also did not file return under S.139 (2) of the Act. He filed return within the period of 3 years contemplated under S.139(4)(b)(ii) of the Act and that was without applying for any extension of time. In other words, the return was filed within the period specified in clause (b) of sub-s.(4) of S.139 and the assessee had not made any application to the officer earlier to extend the date of furnishing the return. Whether in such a case interest contemplated by clause (iii) to the proviso to sub-s.(1) of S.139 of the Act could be levied is the question which I have to deal with here. It is useful here to refer to sub-s.(4)(a) of S.139 of the Act. That reads: