Interest on late filing and advance tax was deleted where sufficient cause and lack of proper opportunity were shown.

Interest under sections 139(8) and 215/217 was held not leviable where the assessee filed the return as an AOP only after the Supreme Court clarified the legal position and after notice under section 148 was issued. The Tribunal accepted that sufficient cause prevented timely filing of the return and advance-tax estimate, that the delay was not deliberate, and that no proper opportunity had been given before charging interest. It also recognised that the assessee could dispute the levy in appeal when liability itself was denied. On these facts, the interest charge was found unsustainable and was deleted.

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Issues: Whether interest charged under sections 139(8) and 215/217 of the Income-tax Act, 1961, was leviable on the assessee for the years under consideration.

Analysis: The return in the status of AOP was filed only after the legal position was clarified by the Supreme Court and after notice under section 148 was issued. The Tribunal held that the assessee was prevented by sufficient cause from filing the return and advance-tax estimate within time, and that the levy of interest could be disputed in appeal where the assessee denied liability altogether. It also noted that no proper opportunity had been afforded before charging interest, and that in the facts of the case the delay could not be treated as deliberate. On these facts, the Tribunal found that the assessee was not liable for interest under sections 139(8) and 215/217.

Conclusion: The levy of interest under sections 139(8) and 215/217 was not sustainable and was deleted, in favour of the assessee.

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