KISHANLAL HARICHARAN Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) FOR the assessment year 1962-63 ending with the Diwali of 1961, the petitioner failed to submit a return of income before June 30, 1962, as he was bound to do under Section 139(1) of the Income-tax Act, 1961. On February 16, 1963, the Income-tax Officer issued a notice to the petitioner under Section 139(2) calling upon him to submit a return before March 18, 1963. Even then no return was fifed. Later, in August, 1966, the Income-tax Officer issued a notice under Section 142(1) of the Act directing the petitioner to produce his accounts on September 5 1966. The clerk of the petitioner appeared before the Income-tax Officer on December 9, 1966, and prayed for time. The Income-tax Officer refused to grant time and after waiting till the end of the day, he proceeded to make an assessment under Section 144 of the Act to the best of his judgment. In addition to the tax, the Income-tax Officer also directed the petitioner to pay penal interest of Rs. 11,991-19. He purported to levy penal interest under the third clause of proviso to Section 139(1)(b) of the Act. The petitioner preferred an appeal to the Appellate Assistant Commissioner against the order of assessment. The Appellate Assistant Commissioner granted some slight relief to the petitioner regarding the quantum of tax and dismissed the appeal. As the petitioner was advised that there were no grounds for preferring an appeal to the Income-tax Appellate Tribunal, he did not prefer an appeal questioning the quantum of tax. He was also advised that he could not prefer an appeal against an order levying penal interest. He, therefore, filed the present application for the issue of a writ in which he questions the levy of penal interest only.

(2.) SRI T. Ramachandra Rao, learned counsel for the petitioner, submitted that the third clause of the proviso to Section 139(1)(b) is inapplicable to the facts of the case. We are of the view that SRI Ramachandra Rao is right in his submission. The proviso to Section 139(1)(b) is as follows: