TMI Blog1984 (12) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... rcumstances of the case, the Tribunal was justified in cancelling the penalties levied under section 271(1)(a) ? The respondent-assessee is a partner in the firm, M/s. Manik Rao Brothers. He filed voluntary returns for the assessment years 1959-60, 1960-61, 1961-62 and 1962-63 all on August 2, 1963. The return for the assessment year 1963-64 was filed on August 2, 1964. On account of the delay in filing the returns, the ITO treated the assessee as being in default and imposed penalties under cl. (a) of sub-s. (1) of s. 271 of the Act. In appeal before the AAC, the assessee contended that as the returns had been furnished before the end of four years from the end of the relevant assessment years, that is to say, the period prescribed by sub-s. (4) of s. 139 of the Act, he was not liable to any penalty. It was also pointed out by the assessee that interest had been levied under clause (iii) of the proviso to sub-s. (1) of s. 139 and, therefore, no question arose of imposing a penalty. Both the contentions were rejected by the AAC. In second appeal before the Income-tax Appellate Tribunal, the assessee raised substantially the same contentions. The Appellate Tribunal took the vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y cl. (i) of the proviso to sub-s. (1) of s. 139, the period may be extended up to September 30, of the assessment year without charging any interest, and in a case covered by cl. (ii) of the proviso, the period may be extended up to December 31, of the assessment year, similarly without charging any interest. But where the period is extended beyond the dates mentioned in clauses (i) and (ii), then under cl. (iii), the assessee is liable to pay interest from October 1, or January 1, as the case may be, of the assessment year to the date of the furnishing of the return on the amount of tax payable on the total income reduced by the advance tax paid and any tax deducted at source. Similarly, in the case of a return furnished under sub-s. (2) of s. 139, the ITO has power to extend the date for furnishing the return subject to payment of interest in the circumstances set forth in relation to voluntary returns under sub-s. (1) of s. 139. Where, however, the assessee does not furnish a return within the time allowed to him under sub-s. (1) or sub-s. (2) of s. 139, then before any assessment is made, he may, under sub-s. (4) of s. 139, furnish a return for any previous year at any time be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payable from the 1st day of October or the 1st day of January, as the case may be, of the assessment year to the date of the furnishing of the return (a) in the case of a registered firm or an unregistered firm which has been assessed under clause (b) of section 183, on the amount of tax which would have been payable if the firm had been assessed as an unregistered firm; and (b) in any other case, on the amount of tax payable on the total income reduced by the advance tax, if any, paid or by any tax deducted at source, as the case may be. It is only where the ITO extends the time for furnishing the return beyond September 30, or December 31, as the case may be, that interest becomes payable. Now the contention on behalf of the Revenue is that there is no material to warrant the finding that an application had been made by the assessee for extension of time and that upon such application, the ITO extended the time. It is urged that the imposition of interest does not warrant the assumption that an application for extension of time was made by the assessee and allowed by the ITO. The proviso to sub-s. (1) of s. 139 requires the assessee to make an application for exten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith a return filed in the circumstances mentioned in sub. s. (4) of s. 139. Our attention has also been drawn to the decision of this court in CIT v. Kulu Valley, Transport Co. P. Ltd. [1970] 77 ITR 518. That was a case where the returns were filed under sub-s. (3) of s. 22 of the Indian I.T. Act, 1922. They were not returns furnished within the time allowed by or under sub-s. (1) or sub-s. (2) of s. 22 of that Act. Accordingly, that case also need not be considered. In the result, we uphold the answer returned by the High Court to the first question raised in the reference. The second question raises the point whether the Appellate Tribunal was justified in cancelling the penalties levied under cl. (a) of sub-s. (1) of s. 271. That provision reads : 271. (1) If the Income-tax Officer or the Appellate Assistant Commissioner in the course of any proceedings under this Act, is satisfied that any person (a) has without reasonable cause failed to furnish the return of total income which he was required to furnish under sub-section (1) of section 139 or by notice given under sub-section (2) of section 139 or section 148 or has without reasonable cause failed to furnish ..... X X X X Extracts X X X X X X X X Extracts X X X X
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