ARIJIT PASAYAT,C.J. - (1.) AT the instance of the Revenue, following question has been referred for opinion of this Court under s. 256(1) of the Income-tax Act, 1961 ('the Act') by the Income-tax Appellate Tribunal, Delhi Bench 'A', New Delhi (in short, the Tribunal) : "Whether, on the facts and in the circumstances of the case, and keeping in view the judgment in Garg and Co. vs. CIT (1974) 97 ITR 639 (Del) : TC 9R.484, the Tribunal was right in law in holding that the interest of Rs. 56,720, Rs. 39,037, Rs. 53,780 and for the asst. yrs. 1962-63, 1963-64 and 1964-65 respectively levied under S. 139 could be deleted under S. 154 of the IT Act, 1961 ?" This judgment shall cover IT Ref. Nos. 90 of 1980, 91 of 1980 and 92 of 1980 as the dispute involved is identical in all the three IT references.
(2.) BRIEF reference of the factual aspects would suffice : The assessee did not file his returns of income under S. 139(1) of the Act for the asst. yrs. 1962- 63, 1963-64 and 1964-65. Notices under S. 139(2) were also not issued for these years. Action under S. 147(a) was taken for all the three years and notices under S. 148 were issued on 15th Jan., 1973. In response to these notices, the assessee filed returns for the aforesaid assessment years, and assessments for all the three years were completed on 24th March ,1973. Interest of Rs. 72,020 under S. 139 was levied for the asst. yrs. 1962-63 which was subsequently reduced to Rs. 56,720. Similarly for the asst. yr. 1963-64, interest of Rs. 69,538 was levied which was reduced to Rs. 53,780. For the asst. yr. 1964-65, interest was first levied at Rs. 56,438 which was later on reduced to Rs. 39,037. The assessee did not file appeals against the orders of assessment. Rectification application in terms of S. 154 of the Act was filed on 15th April, 1975, pleading that in view of this Court's judgment in Garg and Co. vs. CIT (1974) 97 ITR 639 (Del) : TC 9R.484, no interest under S. 139(1) was leviable and levy was a mistake apparent from the record. By orders dt. 20th May, 1975, the ITO did not accept the assessee's submission. According to him, position of law regarding charging of interest under S. 139 had undergone a change by amendment of S. 139 (8) w.e.f. 1st April, 1972. Basic change that was brought about was that interest at specified rate was chargeable if return was filed later than the due date, irrespective of the fact whether any extension was granted by the ITO or not. Appeals were preferred before the Appellate Assistant Commissioner (in short the AAC). The assessee's stand before the AAC was that S. 139(8)(a) was substituted by the Finance Act, 1972 w.e.f. 1st April, 1972, and therefore, these provisions were not retrospective. It was pleaded that position of law prior to the aforesaid amendment was that the interest for delayed returns could only be charged if extension of time had been sought by the assessee and the ITO had granted the extension. The AAC held that the provisions of S. 139(8)(a) were not retrospective. Reference was made to paras. 17 and 18 of the Explanatory Notes on the Taxation Laws (Amendment) Act, 1978. It was further held that in view of this Court's judgment in Garg and Co.'s case (supra), interest under S. 139(1) could not have been levied. He, therefore, held that applications under S. 154 of the Act were acceptable. The Revenue preferred appeals before the Tribunal. It was submitted that scope of rectification under S. 154 was limited and any controversial issue would not come within the ambit of S. 154. The Tribunal held that the decision of this Court in Garg and Co.'s case (supra) was binding on ITO and, therefore, interest could not have been charged. It upheld the order of the AAC. On being moved, reference as aforestated has been made. We have heard the learned counsel for the Revenue. There is no appearance on behalf of assessee when the matter was called in spite of service of notice. We need not go into the question whether the case at hand was one to which S. 154 was applicable. It has to be noted that in the case of Ganesh Dass Sree Ram vs. ITO (1987) 66 CTR (SC) 135 : (1988) 169 ITR 221 (Del) : TC 43R.195, the apex Court held that interest for delay in filing of return could be legally charged under proviso (iii) to S. 139(1) of the IT Act, 1961 where the return was filed voluntarily but after the due date and that an application for extension of time for filing of return was not a condition precedent for charging such interest. In CIT vs. Garg & Co. (1989) 176 ITR 114 (SC) : TC 43R.237, the decision in Garg & Co.'s case (supra) decided by this Court, was held to be not in order. That being the position, the question whether S. 154 had application is of academic interest. The question referred has to be answered in the negative in favour of the Revenue and against the assessee. References stand disposed of accordingly.;