COMMISSIONER OF INCOME TAX Vs. TRIPLE CROWN AGENCIES

JUDGEMENT

(1.) THE following question has been referred by the Tribunal under S. 256(1) of the INCOME TAX ACT, 1961, for short 'the Act', at the instance of the Revenue :

(2.) THE assessee is a registered firm. Assessment year is 1978 -79. The assessee did not submit return as contemplated under sub -s. (1) of S. 139 of the Act. The ITO did not issue notice to the assessee under sub -s. (2) of S. 139 of the Act. Long after the end of the previous year relevant to the assessment year, ITO issued notice to the assessee under S. 148 of the Act averring that income chargeable to tax escaped assessment for the asst. year 1978 -79 by reason of the failure on the part of the assessee to make a return. On receipt of the notice the assessee submitted return and also his account books. The ITO finally passed assessment order dt. 6th Sept., 1982 assessing total income at Rs. 1,14,770 and levying income -tax as also interest under ss. 139 and 217(1A) of the Act. The assessee filed an appeal against this order before the CIT(A) raising various contentions including the contention that the escaped assessment having been made in pursuance to notice under S. 148, it was not a regular assessment as defined in S. 2(40) of the Act and contemplated in ss. 139(8) and 217(1A) of the Act and, hence, interest contemplated in these provisions cannot be levied. CIT upheld this contention. The Tribunal also upheld the contention in a further appeal by the Revenue. Hence, this revision (sic).

(3.) SUB -s. (8) deals with cases where return under sub -ss. (1) or (2) or (4) was not furnished at all or furnished after the specified date. In such cases liability to pay simple interest at 12% per annum would arise for the period referred to in the sub - section. Interest is payable on the amount of tax payable on the "total income as determined on regular assessment", as reduced by the advance tax, if any, paid, and any tax deducted at source.