TMI Blog1986 (6) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... uch time was extended till June 30, 1970. The assessee could not file the returns in respect of the said three assessment years even during the extended time. The assessee filed returns for the said assessment years respectively on June 30, 1965, December 27, 1967, December 27, 1967, February 3, 1970 and February 11, 1971. In making the assessments, the Income-tax Officer charged interest under sub-sections (1) and (8) of section 139 of the Act. The Income-tax Officer also issued notices to the assessee to show cause why penalty should not be imposed on the assessee for late filing of the returns under section 271 (1)(a). The assessee contended before the Income-tax Officer that it had large number of branches exceeding 100 throughout India as also a branch in Nepal. Each of the said branches maintained separate accounts and it took a long time to finalise the accounts. The assessee contended further that at the relevant time, a number of employees of the assessee working in its accounts department were either ill or on leave. The turnover of the assessee was huge and by reason of the delay in finalisation of the accounts for one year, caused, in turn, delay in filing of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alty in the application made before the Commissioner of Income-tax inasmuch as the aggregate of the penalty imposed exceeded the jurisdiction of the Commissioner. Before the Tribunal, the assessee reiterated its contentions made before the authorities below and drew the attention of the Tribunal to the order passed by the Commissioner of Income-tax waiving interest. It was further urged that there was a reasonable cause for the delay in the submission of the return by the assessee in each of the years. The reasons were that the assessee had a large number of branches throughout India and also one in Nepal, that the assessee maintained separate accounts for each branch; that it took considerable time to finalise such accounts and particularly so, when several employees of the assessee in the accounts department had fallen sick. The above caused the delay in filing of the returns. It was also contended that the Revenue had failed to establish that there was a conscious disregard of legal obligation by the assessee. The Tribunal did not accept the contentions of the assessee. It was held that the reasons for which interest has been waived by the Commissioner made no difference i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t year, or before the 30th day of June of the assessment year, whichever is later ; (b) in the case of every other person, before the 30th day of June of the assessment year : Provided that, on an application made in the prescribed manner, the Income-tax Officer may, in his discretion, extend the date for furnishing the return (i) in the case of any person whose total income includes any income from business or profession the previous year in respect of which expired on or before the 31st day of December of the year immediately preceding the assessment year, and in the case of any person referred to in clause (b), up to a period not extending beyond the 30th day of September of the assessment year without charging any interest; (ii) in the case of any person whose total income includes any income from business or profession the previous year in respect of which expired after the 31st day of December of the year immediately preceding the assessment year, up to the 31st day of December of the assessment year without charging any interest; and (iii) up to any period falling beyond the dates mentioned in clauses (i) and (ii), in which case, interest at six per cent. per ann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filing the returns, the Income-tax Officer treated the assessee as being in default and imposed penalty under section 271(1)(a). The assessee contended before the Appellate Assistant Commissioner and the Income-tax Appellate Tribunal in successive appeals that the returns had been furnished before the end of four years after the end of the relevant years, the period prescribed by section 139(4), and that he was not liable to pay any penalty. It was also contended that inasmuch as the interest had been levied under section 139(1)(iii), there was no question of imposing penalty. The Appellate Assistant Commissioner rejected the contentions of the assessee. But the Tribunal held that the assessee had, in fact, given his reasons for the delay in filing the returns both for the levy of interest under section 139 and levy of penalty under section 271. It was held that the Income-tax Officer having levied interest up to the date of the filing of the returns, it must be presumed that the Income-tax Officer had extended the time for the filing of the returns after satisfying himself that it is a case for extension of time. On a reference, the Andhra Pradesh High Court held that the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the statutory time or within the time as extended by the Income-tax Officer and where the other conditions for imposition of penalty under section 271 were satisfied, then penalty could be levied even where interest was charged and the return was filed before the assessment. Learned advocate for the Revenue also relied on a decision of a Fall Bench of the Allahabad High Court in Metal India Products v. CIT [1978] 1 13 ITR 830, where it was held that where the assessee did not file his return within the time prescribed, then, even if the return had been filed under section 139(4), that is, within four years from the end of the assessment year and before the assessment order was made, the assessee would be liable to pay penalty under section 271(1)(a) of the Act for not having filed the return either within the time prescribed under section 139(1) or the period prescribed under section 139(2). The learned advocate for the Revenue also submitted that in the instant case, the interest having been waived by the Commissioner of Income-tax subsequently, the decision of the Supreme Court in M. Chandra Sekhar [1985] 151 ITR 433, was not applicable to the facts of the instant case. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of the returns, a presumption could still be raised that the Income-tax Officer had further extended the time for the filing of the returns. In the facts of this case, it appears to us that interest having been charged by the Income-tax Officer up to the date of the filing of the return, the principles laid down by the Supreme Court in M. Chandra Sekhar [1985] 151 ITR 433 are clearly attracted. The fact that such interest was waived subsequently by the Commissioner of Income-tax would make no difference in principle inasmuch as it is the primary act of the Income-tax Officer in accepting the return filed and charging interest up to the date of the filing which raises the presumption of extension of time. What was waived by the Commissioner was interest which was already charged by the Income-tax Officer. As held by the Gujarat High Court in Liberal Engineering Works' case [1986] 158 ITR 520, the Income-tax Officer having levied interest up to the date of the filing of the return was not justified in further invoking the penalty proceedings. We accept the contention of the assessee that even in the said three assessment years where time was in fact extended by the Income-tax Off ..... X X X X Extracts X X X X X X X X Extracts X X X X
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