COMMISSIONER OF INCOME TAX A P Vs. M MANIK RAO
HIGH COURT OF ANDHRA PRADESH
COMMISSIONER OF INCOME TAX
M. MANIK RAO
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CHINNAPPA REDDY, J. -
(1.) THE assessee submitted his returns of income beyond the period prescribed by S. 139(1) of the IT Act, 1961. The ITO accepted the returns and proceeded with the assessment. He charged interest
under the third clause of the proviso to S. 139(1) of the Act. He also levied penalty under S. 271(1)
(a) of the Act on the ground that the assessee had failed without reasonable cause to furnish the returns of income which he was required to furnish under S. 139(1). Under the third clause of the proviso to S. 139(1), the ITO is empowered, in his discretion, on an application by the assessee to extend the date for furnishing a return of income up to any period, in which case interest at 6 per cent shall be payable by the assessee from the first day of October or the 1st day of January, as the case may be, of the assessment year to the date of the furnishing of the return. Since interest is chargeable under the third clause of the proviso only when the ITO extends the time for the furnishing of the return on the application of the assessee, the Tribunal presumed that there must have been an application by the assessee and that the ITO must have extended the time for filing the return.
(2.) THE Tribunal thought that it was justified in drawing such a presumption as the correct state of facts was not clear from the records of the case which were available to them. We cannot
say that the Tribunal erred in drawing such an inference. Illustration (e) to S. 114 of the Evidence
Act authorises the drawing of a presumption that official acts have been regularly performed. Since
interest was not chargeable unless time had been extended, the Tribunal was justified in holding
that time must have been extended on the application of the assessee. Accepting that finding we
agree with the Tribunal that penalty was not leviable.
The questions referred to us are, therefore, answered in favour of the assessee and against the
Department. There will be no order as to costs.;
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