1978 (7) TMI 83 - HC - Income Tax

Summary

Issues:
1. Whether the levy of interest under section 139(1) of the Income-tax Act, 1961 amounts to condonation of delay in filing the return of income?
2. Whether the calculation of penalty under section 271(2) of the Income-tax Act, 1961 is valid in law?

Detailed Analysis:
Issue 1: The assessee contended that the levy of interest under section 139(1) of the Act should be deemed as condonation of the delay in filing the return. The interest was levied under clause (iii) of the proviso to section 139(1) when an application for extending the time for filing the return was allowed. However, in this case, the assessee did not apply for an extension of time, and the interest was levied under section 139(1) as the conditions were met. The court held that the levy of interest did not amount to condonation of delay as required by law. The Tribunal's decision that the interest levy did not condone the delay was upheld.

Issue 2: Section 271(2) of the Act states that the penalty imposed on a registered firm shall be the same as that on an unregistered firm under certain circumstances. The assessee argued that section 271(2) would not apply as the registered firm was liable to pay tax during the relevant assessment year. However, the court disagreed, stating that section 271(2) mandates the same penalty for a registered firm as for an unregistered firm in case of default. The Tribunal's decision to apply section 271(2) in this case was upheld.

In conclusion, both issues were decided against the assessee, and no costs were awarded in the case.