K B STORES Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE following question of law has been referred in this reference by the Income-tax Appellate Tribunal, Gauhati:

(2.) THE assessee is a firm and in respect of the assessment year 1965-66, a return of income was filed on September 16, 1965. Later on it was found that this return had not been signed by a partner of the firm but had been signed, by an employee, who is the manager of the firm. THEreafter, a valid return was filed on December 19, 1968, and the assessment was completed on July 17, 1969. While completing the assessment the Income-tax Officer charged interest under the provisions of Section 139 as according to him the return had not been filed within the time allowed under Section 139(1) of the Income-tax Act, 1961, hereinafter referred to as "the Act". THE Income-tax Officer treated the first return as no return and accordingly he charged the interest up to the date of filing the proper return. THE amount of interest charged came to Rs. 34,059, THE assessee filed an appeal against the charging of this interest before the Appellate Assistant Commissioner. THE Appellate Assistant Commissioner held that the charging of interest was actually penalty and unless it was proved that there was a wilful default or a deliberate mistake, no interest could have been charged. THE Appellate Assistant Commissioner found that there was no, wilful default involved in this case and that it was a case of mistake and, therefore, interest should not have been charged. THE Appellate Assistant Commissioner remitted the interest charged by the Income-tax Officer. THE Appellate Assistant Commissioner granted relief to the assessee on some other ground.

(3.) IN the instant case the assessment has been made under Section 143(3) of the Act. The total income assessed is Rs. 4,43,980 and the interest has been calculated at Rs. 34,059.