COMMISSIONER OF INCOME TAX Vs. BANKATLAL GOPIKISHAN

JUDGEMENT

(1.) THE respondent -assessee, an HUF, did not submit its return of income for the asst. year 1962 -63 within the prescribed period. By his order dt. 31st Aug., 1966, the ITO assessed the respondent to tax of Rs. 19,751.95. By the same order, he directed payment of interest of Rs. 3,647.54 under s. 139 of IT Act, 1961. The assessee preferred an appeal to the AAC against the levy of interest only. The appeal was dismissed as not maintainable. On further appeal, the Tribunal held that the appeal was maintainable and directed the AAC to dispose of the appeal on merits. At the instance of the CIT the following question has been referred to us under S. 256(1) of the IT Act, 1961

(2.) NOW , under the third clause of the proviso to S. 139(1), an ITO is invested with the discretion to extend the time for furnishing the return beyond the dates mentioned in cls. 1 and 2 in which case, interest at nine per cent per annum shall be payable from the first of October or the first of January, as the case may be, of the assessment year to the date of the furnishing of the return on the amount of tax payable on the total income. On the submission of a return within the extended period, the ITO has to proceed to make an order of assessment under S. 143. After completing the assessment and determining the amount of tax, the ITO then levied the interest payable under the third clause of the proviso to S. 139(1). Sec. 246 of the Act makes no express provision for an appeal against the levy of interet under s 139. But according to the respondent the interest levied must also be considered to be "tax" and an appeal would lie under S. 246(c) which provides for an appeal against an order against an assessee if the assessee objects to the amount of tax determined.

(3.) IN several cases arising under the Indian IT Act of 1922, it was held by the High Courts of Andhra Pradesh, Bombay, Madras and Allahabad that no appeal lay under S. 30 of the Act against the levy of interested under S. 18A(6). Vide Boddu Seetharamaswamy vs. CIT (1955) 28 ITR 156 (AP) TC6R.620, CIT vs. Jagdish Prasad Ramnath (1955) 27 ITR 192 (Bom) : TC6R.602, Pt. Deo Sharma vs. CIT (1953) 23 ITR 226 (All) : TC6R.615 and South India Flour Mills Private Ltd. vs. CBDT (1968) 70 ITR 863 (Mad) : TC6R.616. In the Andhra Pradesh case, Subha Rao C.J. said :