Roop Narain Contractor vs Addl. Commissioner of Income Tax

Agrawal, J.—This is a reference made by the Income Tax Appellate Tribunal, Jaipur Bench (hereinafter referred to as "the Tribunal "), u/s 256(1) of the I.T. Act, 1961, hereinafter referred to as "the Act"). The Tribunal has referred the following question for the opinion of this court:

"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in upholding the levy of interest u/s 139(1)(iii) of the Act?"

In respect of the assessment year 1966-67, the assessee was served with a notice calling upon him to file a return of income for the said assessment year. The said notice was served on the assessee on or about November 14, 1966. The assessee submitted the return on August 11, 1967. The ITO charged interest u/s 139 of the Act. The said order of the ITO with regard to the charging of interest was affirmed in appeal by the AAC and the Tribunal. On an application being moved by the assessee, the Tribunal has referred the question aforesaid for the opinion of this court.

Before the Tribunal, reliance was placed on behalf of the assessee on the decision of the Andhra Pradesh High Court in Kishanlal Haricharan Vs. Income Tax Officer, A-Ward wherein it has been held that interest u/s 139(1)(iii) could be charged only if the assessee has applied for extension of time and the ITO grants such extension. It was submitted on behalf of the assessee that as the assessee had not applied for extension of time for filing the return, interest could not be charged u/s 139(1)(iii) of the Act. The Tribunal, however, placed reliance on the decision of this court in Daljit Singh & Co. v. Union of India (D. B. Civil Writ Petition No. 258 of 1971, dated October 22, 1971), wherein this court has held that in view of Section 139(4)(a) of the Act, interest could be charged u/s 139(1)(iii), even though no application for extension was moved before the ITO.

Shri N.K. Jain, the learned counsel for the assessee, has submitted that interest could be charged u/s 139(1)(iii) of the Act in only those cases where the assessee has applied for extension of time for filing the return and the ITO has granted such extension. Shri Jain has placed reliance on the following decisions :

Kishanlal Haricharan Vs. Income Tax Officer, A-Ward

CIT v. Manik Rao [1911] 109 ITR 580

Garg and Company Vs. Commissioner of Income Tax, and

CIT v. Bahri Bros. (P.) Ltd. [1916] 102 ITR 443.

Shri Surolia, on the other hand, has submitted that the view taken by this court in Daljit Singh & Co. v. Union of India finds support from the following decisions:

Biswanath Ghosh Vs. Income Tax Officer, Ward B and Another,

Ganesh Das Sreeram Vs. Income Tax Officer, "A" Ward and Others,

Indian Telephone Industries Co-operative Society Ltd. Vs. Income Tax Officer, Special Survey Circle, Banglore and Another,

Chhotalal and Co. Vs. Income Tax Officer, Morvi and Others,

Progressive Engineering Co. Vs. Income Tax Officer,

Income Tax OFFICER, J-WARD, CIRCLE-I, HYDERABAD DISTRICT Vs. SECUNDERABAD TIN INDUSTRIES.,

In Income Tax OFFICER, J-WARD, CIRCLE-I, HYDERABAD DISTRICT Vs. SECUNDERABAD TIN INDUSTRIES., the matter has been considered at length by a Full Bench of the Andhra Pradesh High Court. In the said judgment, the learned judges of the Andhra Pradesh High Court have overruled their earlier decision in Kishanlal Haricharan Vs. Income Tax Officer, A-Ward . We are fully in agreement with the reasons given by the learned judges of the Andhra Pradesh High Court in Income Tax OFFICER, J-WARD, CIRCLE-I, HYDERABAD DISTRICT Vs. SECUNDERABAD TIN INDUSTRIES., . In our view, in the facts and circumstances of the case, the Tribunal was justified in upholding the levy of interest u/s 139(1)(iii) of the Act.

Hence, the question referred by the Tribunal is answered in the affirmative, i.e., in favour of the Revenue and against the assessee. There will be no order as to costs.