TaxTMI 
TaxTMI 
1991 (4) TMI 166
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....e Act, stating that on going through the records, it is noticed that in computing the tax, interest chargeable under s. 139(8) had to be charged, although a direction was given in the assessment order. As this was a mistake apparent from record, he rectified in under s. 154 of the Act and levied interest under s. 139(8). 3. The assessee went in appeal and submitted that no interest was leviable under s. 139(8) in this case because on the basis of the regular assessment refund of Rs. 4,056 was due to them. It was the case of the assessee before the CIT(A) that where no tax by the firm is payable, compensatory interest under s. 139(8) is not chargeable at all. The assessee relied on two decisions of Gauhati High Court; one reported in CIT v....
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.... under s. 139(8) at all can be charged in the instant case where after giving credit for advance tax and TDS the appellant was entitled to refund. The whole purpose behind s. 139(8) is to see that the returns are filed in time and in case they are so filed, the assessee has to pay interest on the tax due. One important condition to be satisfied is that there should be tax payable on the total income as determined on regular assessment, after taking into account advance tax and tax deducted at source. The fact that the assessee is a registered firm will not make any difference so far as satisfaction to this condition is concerned. Further, the provision has been made for the purpose of compensating the Government for with holding the tax by ....
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.... the case of Ganesh Dass Sreeram vs. ITO (1987) 66 CTR (SC) 135 : (1988) 169 ITR 221 (SC). The learned counsel, particularly relied on the observation of the Court at page 230 which are as follows: "Before we part with these appeals, we think we should clarify one situation, namely, where the advance tax duly paid covers the entire amount of tax assessed, there is no question of charging the registered firm with interest even though the return is filed by it beyond the time allowed, regard being had to the fact that payment of interest is only compensatory in nature. As the entire amount of tax is paid by way of advance tax, the question of payment of any compensation does not arise." 7. We have considered the submissions made on both t....
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....2": For the purposes of this sub-section, where the assessee is a registered firm or an unregistered firm which has been assessed under cl. (b) of s. 183, the tax payable on the total income shall be the amount of tax which would have been payable if the firm had been assessed as an unregistered firm." The language of the Explanation is clear and unambiguous. This Explanation clearly provides that where the assessee is a registered firm or unregistered firm under s. 183(b), the tax payable for this sub-s. (i.e. 139(8)) on the total income shall be the amount of tax which would have been payable if the firm had been assessed as an unregistered firm. The tax payable for the purposes of calculation of simple interest has to be determined on ....