COMMISSIONER OF INCOME TAX Vs. RAMJIBHAI HIRJIBHAI AND SONS

JUDGEMENT

(1.) THE following question has been referred to us for our opinion: "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the ITO had no jurisdiction under the provisions of S. 154 of the Act for charging interest under S. 139 for late submission of the return ?"

(2.) SHORTLY stated, the facts leading to this reference are as under: The relevant assessment year is 1967 68. The relevant accounting year was S. Y. 2022. The notice to file return under S. 139(2) of the IT Act, 1961, was issued on June 26, 1967, and served on the assessee on July 15, 1967. It is common ground that by a circular of the Department the time for filing return was extended up to 15th August, 1967. On August 11, 1967, the assessee made an application that the time for furnishing return may be extended up to September 30, 1967, for the reason that the data to be furnished with the return of income was not complete. It appears that no formal order was made in writing by the ITO on this application. However, on September 29, 1967, the assessee made another application that it had to file return of its income for S. Y. 2022 on or about 30th September, 1967, but as the data to be furnished along with the return was still not complete, it was prayed that the time for furnishing return be extended up to 31st December, 1967. This application for adjournment was forwarded to the ITO under the cover of letter of the chartered accountant of the assessee firm of the same date. It appears that the ITO has made an endorsement on the said covering letter that the time for furnishing return was extended up to 15th November, 1967. The assessee could not file its return within the time granted by the ITO but filed it as a matter of fact on December 23, 1967. The ITO completed the assessment on 26th May, 1969, under S. 143(3) of the IT Act, 1961, and determined the total income at Rs. 1,99,987. The ITO, however, did not charge interest under S. 139 of the Act for late submission of the return. When this omission was noticed by him, he issued notice under S. 154 of the IT Act, 1961, and called upon the assessee to file objections, if any, to the proposed rectification. The assessee filed its objections against the proposed rectification, which were, however, rejected by the ITO who rectified his original order under S. 154 and levied penal interest of Rs. 2,610.

(3.) THE revenue being aggrieved with this order of the AAC went in appeal before the Tribunal. The Tribunal felt that the question, whether or not interest was leviable in the case before it was a matter of argument and debate in view of the decision of the Andhra Pradesh High Court in Kishanlal Haricharan vs. ITO (1971) 82 ITR 660 (AP) and the decision of the Mysore High Court in Indian Telephone Industries Co operative Society Ltd. vs. ITO (1972) 86 ITR 566 (Mys). In the opinion of the Tribunal, as there was divergence of judicial opinion between the Andhra Pradesh High Court as opined in Kishanlal Haricharan's case (supra) and the Mysore High Court in Indian Telephone Industries' case (supra), it could not be said that the provisions of S. 154 would be applicable on the facts of the case. The Tribunal, therefore, confirmed the order of the AAC. At the instance of the Revenue, therefore, the question set out above has been referred to us.