- (1.) ON an application under S. 256(1) of the IT Act, 1961, the Tribunal has referred the following question for our opinion : "Whether, on the facts and in the circumstances of the case, the Tribunal is justified in law in holding that charging of interest under S. 139(8) of the IT Act, 1961, is misconstrued and accordingly quashing the rectification order under S. 154 and deleting interest under S. 139(8) for the asst. yrs. 1984-85 and 1985-86?"
(2.) THE assessee-company filed its return of income on 31st July, 1984, declaring the income Rs. 9,03,32,353 for the asst. yr. 1984-85. Similarly, the assessee filed the return on 31st July, 1985, declaring the income of Rs. 5,50,10,080 for the asst. yr. 1985-86. The returns were due to be filed on 30th June, 1984, and 30th June, 1985, respectively for both the years. No interest was charged, for delay in filing the return, under S. 139(8) of the said Act. Thereafter an order under S. 154 of the IT Act, 1961, was passed on 20th July, 1989, for the asst. yr. 1984-85 charging the interest under S. 139(8) of the said Act, for delay in filing of the return. Similarly, for the asst. yr. 1985-86, one more order under S. 154 of the IT Act, 1961, was passed on 27th July, 1989, and interest for delayed period i.e., from 1st July to 30th July was charged. In appeal before the CIT(A), CIT(A) has set aside the order of AO passed under S. 154 of the said Act. In appeal before the Tribunal, the Tribunal has also affirmed the order of the CIT(A). Heard learned counsel for the parties. The facts are not in dispute that while the original order was passed under S. 143(3) of the IT Act, interest was not charged under S. 139(8) of the Act, for the delayed filing of return on 31st July, 1984, and 31st July, 1985. In the order under s. 154 of the said Act, the ITO has charged the interest of Rs. 42,950 for the asst. yr. 1984-85 and Rs. 36,611 for the asst. yr. 1985-86. The Tribunal has considered the various decisions especially the decision of Karnataka High Court directly on the issue and has taken the view that the ITO cannot charge the interest in an order under S. 154 of the said Act.
(3.) IN B.V. Aswathaiah Bros. vs. ITO (1986) 52 CTR (Kar) 49 : (1985) 155 ITR 442 (Kar) : TC 43R.268 the Karnataka High Court has considered the meaning of "month" and has taken the view that the meaning of 'month' referred in S. 139(8) of the IT Act r/w r. 119A of the IT Rules, 1962, means the complete month and where the month is of 31 days, if the return was filed on the 31st day of the month, no interest under S. 139(8) of the Act can be charged.;