SANJANA FILMS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE petitioner is a partnership firm engaged in the business of film distribution and running a cinema theatre. THE returns of income for the assessment years 1986-87 and 1987-88 were due to be filed on July 31, 1986, and July 31, 1987, respectively. In respect of the assessment years 1986-87 and 1987-88, the petitioner filed Form No. 6 for extension of time up to August 31, 1986, and August 31, 1987, respectively. However, the returns for both the assessment years 1986-87 and 1987-88 were filed voluntarily by the petitioner on October 13, 1987, and May 9, 1988, respectively, and no notice was served by the Department for filing of the return under any of the provisions of the Income-tax Act. THE second respondent completed the assessment based on the primary facts placed before him by the petitioner. However, an expenditure of Rs. 2,00,000 in assessment year 1986-87 and Rs. 1,00,000 in the assessment year 1987-88 was disallowed by the second respondent on the ground that the petitioner was unable to substantiate its claim for expenditure and agreed to them being added back.

(2.) WHILE so computing the assessment, the second respondent levied interest as follows :

(3.) THE application of the petitioner is rejected mainly on the ground that Section 273A(1) of the Income-tax Act, 1961, does not permit waiver of interest for more than one year. In other words, the impugned order is essentially based on an assumption that no relief could be granted under Section 273A(1) of the Act in respect of more than one assessment year. THE Commissioner, in the impugned order, has opined :