1986 (1) TMI 52 - HC - Income Tax

Court upholds assessment order validity and interest levy under section 139(1) proviso (iii) for late tax returns.

Lehnu Mal Ram Krishan Versus Income-Tax Officer And Others

Lehnu Mal Ram Krishan Versus Income-Tax Officer And Others - [1986] 161 ITR 649, 59 CTR 100, 30 TAXMANN 377 Issues Involved:1. Validity of the assessment order dated January 31, 1972.2. Jurisdiction of appellate authorities regarding the levy of interest under section 139(8).3. Applicability of interest provisions under section 139(1)(iii) and section 139(4).Detailed Analysis:1. Validity of the Assessment Order Dated January 31, 1972:The petitioner challenged the assessment order dated January 31, 1972, passed by the Income-tax Officer, Simla, assessing the income at Rs. 1,47,570. The petitioner filed an appeal with the Appellate Assistant Commissioner, who provided partial relief, reducing the assessable income to Rs. 1,32,743. A further appeal to the Income-tax Appellate Tribunal was dismissed. The court reviewed the facts and found no suppression of material facts by the petitioner, thus rejecting the technical objection raised by the respondents.2. Jurisdiction of Appellate Authorities Regarding Levy of Interest Under Section 139(8):The petitioner contended that the interest under section 139(8) was not chargeable and that the appellate authorities lacked jurisdiction to adjudicate on this matter. The appellate authorities had previously held that they had no jurisdiction to entertain the appeal concerning the levy of interest, as no appeal was provided for the quantum of levying interest. The court held that in such circumstances, the petitioner could invoke the writ jurisdiction of the court for appropriate relief if entitled. Thus, the writ petition was deemed maintainable.3. Applicability of Interest Provisions Under Section 139(1)(iii) and Section 139(4):The petitioner argued that interest could only be charged if the application for extension of time had been allowed by the Income-tax Officer. The court analyzed section 139 as it stood for the assessment year 1968-69 and concluded that a person who files a return under section 139(4) is subject to the provisions of clause (iii) of the proviso to section 139(1), which mandates interest at 9% per annum from the specified dates to the date of filing the return. The court rejected the petitioner's contention that no interest is payable if the return is filed under section 139(4), citing precedents from various High Courts, including Ramlal Ramgopal Agarwal v. CIT, Indian Telephone Industries Co-operative Society Ltd. v. ITO, and Koipally Brothers v. ITO, which supported the view that interest is chargeable under these provisions.The court distinguished the judgments cited by the petitioner, such as Kishanlal Haricharan v. ITO, CIT v. Bahri Brothers (P) Ltd., Mulakh Raj Bimalkumar v. ITO, and National Hotel and Dilkusha Cabin v. ITO, noting that these cases did not consider the specific provisions of section 139(4) or were factually different.Conclusion:The court concluded that the income-tax authorities were competent to charge interest under proviso (iii) of section 139(1) for returns filed under section 139(4). Consequently, the writ petition was dismissed, upholding the validity of the assessment order and the levy of interest.