DEPUTY COMMISSIONER OF INCOME TAX Vs. I O L LTD
LAWS(IT)-1994-3-6
INCOME TAX APPELLATE TRIBUNAL
Decided on March 30,1994

Appellant
VERSUS
Respondents

JUDGEMENT

R. Acharya, Accountant Member - (1.) THE revenue has instituted these appeals against the order of CIT(A) for assessment years 1984-85 and 1985-86 and the only ground of appeal raised therein is as under : Assessment year 1984-85 : That on the facts and in the circumstances of the case, the Learned Commissioner of Income-tax (Appeals) erred in holding that charging of interest under Section 139(8) is misconstrued and accordingly the rectification order for the assessment year 1984-85 is quashed and in that view deleting the interest under Section 139(8) for Rs. 42,950 for the assessment year 1984-85. Assessment year: 1985-86: That on the facts and in the circumstances of the case, the Learned Commissioner of Income-tax (Appeals) erred in holding that charging of interest under Section 139(8) is misconstrued and accordingly the rectification order for the assessment year 1985-86 are quashed and in that view deleting the interest under Section 139(8) for Rs. 36,611 for assessment year 1985-86.
(2.) Since common grounds and similar issues are involved in both the appeals they are disposed of together for the sake of convenience. Briefly stated facts of the case are that the Assessing Officer (A.O.) has rectified the original assessment orders for the assessment years 1984-85 and 1985-86 under Section 154 on the ground that both the returns of income for asst. years 1984-85 and 1985-86 were filed on 31-7-1984 and 31-7-1985, while they were due on 30-6-1984 and 30-6-1985 respectively, interest under Section 139(8) was not charged inadvertently. As there occurred one completed month delay according to the A.O. in submitting both the returns, he issued notice of hearing to the assessee and the assessee objected to the proposed rectification under Section 154 on the ground and for the reason that the fraction of a month is to be ignored and the delay is not of a full month in terms of Rule 119A of the Income-tax Rules, 1962. The A.O. did not entertain the contention of the assessee as according to him the date of filing of return is also includible for the purpose of computing the period of default for which the interest is chargeable. He, therefore, rectified both the assessment orders and charged interest of Rs. 42,950 under Section 139(8) for the assessment year 1984-85 and of Rs. 36,611 for the assessment year 1985-86.
(3.) ON an appeal before the CIT(A), the assessee submitted that though the returns were filed late for both the assessment years, the delay was not for a complete month and therefore, the A.O. should not have charged interest under Section 139(8), in view of Rule 119A. In support of the claim the assessee placed reliance on the decision of Karnataka High Court in the case of B.V. Aswathaiah & Bros. v. JTO [1985] 155 ITR 422, wherein their Lordships referring to the decisions of Madras High Court in the case of CIT v. Kadri Mills (Coimbatorej Ltd. [1977] 106 ITR 846 and of Calcutta High Court in the case of CITv. Brijlal Lohia and Mahabir Prosad Khemka [1980] 124 ITR 485 has explained the meaning of month and has held that a month should be construed as calendar month and not of 30 days. Following the above decision the CIT(A) held that the delay was not for a complete month since the returns for both the assessment years were filed before completion of the month and, therefore, charging of interest under Section 139(8) is misconstrued. Accordingly he quashed the rectification orders under Section 154 for both the assessment years. Aggrieved by CIT(A)'s order the revenue has preferred these appeals to the Tribunal.;


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