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Judgment
The income tax Appellate Tribunal, Allahabad, has referred the following question of law u/s 256(1) of the income tax Act, 1961 (hereinafter referred to as the Act) for opinion to this Court:
Whether, on the facts and in the circumstance of the case, the Tribunal was legally justified in holding that the assessments for assessment years 1978-79 and 1979-80, which were completed after issuing the notices u/s 148, could not be termed as ''regular assessment'' within the meaning of section 139(8) and section 217 of the income tax Act, 1961?"
The present reference relates to the assessment years 1978-79 and 1979-80.
Briefly stated the facts giving rise to the present reference are as follows:-
The respondent has been assessed for income tax in the status of individual. For the assessment years in question, the return of income was filed beyond the prescribed period, therefore, in order to regularise the returns notices u/s 148 were issued. The assessments were framed for both years on 16-4-1986 u/s 143(3) read with section 148 of the Act. Interest as per rule was also directed to be charged. Feeling aggrieved, the respondent preferred separate appeals before the Appellate Assistant Commissioner, income tax, against the levy of interest u/s 139(8)/217 of the Act. The Appellate Assistant Commissioner allowed the appeal on the ground that the levy of interest in assessment u/s 148 of the Act was not justified. Feeling aggrieved, the revenue preferred appeals before the Tribunal. The Tribunal has upheld the order passed by the Appellate Assistant Commissioner and has dismissed both the appeals.
We have heard Sri A.N. Mahajan, learned Standing Counsel for the revenue. Nobody has appeared for the respondent-assessee.
We find that the Apex Court in the case of K. Govindan & Sons v. CIT [2001] 247 ITR 192 1 has held that the Explanation 2 to section 139(8) inserted with effect from 1-4-1985 is clarificatory in nature and is applicable retrospectively. The assessment u/s 147 is a ''regular assessment'' for purpose of section 139(8) of the Act. In this view of the matter, the Tribunal was not justified in upholding the order of the Appellate Assistant Commissioner deleting the levy of interest. We, accordingly, answer the question referred to us in the negative, i.e., in favour of the revenue and against the assessee. However, there shall be no order as to costs.