JAGDISH RICE MILLS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference under Section 256(1) of the Income-tax Act, 1961, by the Income-tax Appellate Tribunal, Nagpur Bench, Nagpur, at the instance of the assessee, referring certain questions of law said to arise from its order in Income-tax Appeal No. 21181 (Bom) of 1967-68, dated May 14, 1971, to the High Court for its opinion. The questions are:

(2.) THE assessee, M/s. Jagdish Rice Mills, Dhamtari, which is a registered firm, derives income from rice milling business. For the assessment year 1962-63, the corresponding accounting year of which ended on Diwali 1961, return of income was filed by the assessee on May 7, 1963, though it was due on September 30, 1962, i.e., late by 7 months, 6 days. THE Income-tax Officer, C-Ward, Raipur, computed the total income of the assessee at Rs. 4,05,491 under Section 143(3) of the Income-tax Act, 1961, raising a demand of Rs. 3,09,036. Since the return was filed late by 7 mouths, 6 days, the Income-tax Officer should have charged interest under Section 139(1) for the late filing of return. As the interest was omitted to be charged in the original assessment, the order of the Income-tax Officer was prejudicial to the interests of the revenue. THE Commissioner of Income-tax, Madhya Pradesh, Nagpur and Bhandara, Nagpur, accordingly issued a notice dated December 11, 1967, to the assessee under Section 263(1) to show cause why action should not be taken to direct the Income-tax Officer to charge interest under Section 139(1) according to law. After giving an opportunity to the assessee of being heard, the Commissioner of Income-lax, by his order dated January 11, 1968, passed under Section 263(1), directed the Income-tax Officer to charge such interest as was leviable under Section 139(1).

(3.) SECTION 139 of the Income-tax Act, 1961, so far as material, reads as follows :