1977 (1) TMI 38 - HC - Income Tax

Application For Extension Application For Rectification High Court Interest Levied For Delayed Filing

Summary

Issues:
1. Assessment year 1963-64 - Late filing of returns under the Income-tax Act.
2. Assessment year 1962-63 - Late filing of returns under the Income-tax Act.
3. Charging of interest for late filing of returns.
4. Application under section 154 of the Income-tax Act for rectification.
5. Interpretation of section 139(4) of the Income-tax Act.
6. Applicability of section 154 for rectification of mistakes apparent from the record.

Analysis:

1. The petitioner did not submit returns for the assessment years 1962-63 and 1963-64 under section 139(1) of the Income-tax Act. Despite notice under section 139(2) to file returns, the petitioner filed returns under section 139(4) before assessment. The assessment orders did not mention interest for late filing, but demand notices indicated interest payment under section 139. The petitioner contended that interest was wrongly charged.

2. The petitioner argued that as no application for extension of time was filed, interest under clause (3) of the proviso to section 139(1) should not apply. Citing precedents, the petitioner claimed that the provision should be read as a whole, requiring a prescribed application for interest to be charged. The department argued that the petitioner's application under section 154 was not maintainable as the mistake was not apparent from the record.

3. The court distinguished a previous case where interest was charged under section 139(2) from the current case where returns were filed under section 139(4). The court held that the conflict between different High Courts on the issue rendered it debatable, making it unsuitable for rectification under section 154. Therefore, the application under section 154 was deemed inapplicable, and the authorities were correct in dismissing it.

4. The court referred to legal experts' opinion that a debatable point of law cannot be rectified under section 154. Since different High Courts had conflicting views on the issue, the court found the matter debatable. Consequently, the court concluded that section 154 was not applicable to rectify the alleged mistake in charging interest for late filing of returns.

5. Ultimately, the court dismissed the applications without costs, as it found no grounds to provide relief to the petitioner. The court did not delve into other contentions raised by the department, as the issue of rectification under section 154 was deemed not maintainable due to the debatable nature of the legal point involved in the case.