TMI Blog1976 (4) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... for furnishing return may be extended up to September 30, 1967, for the reason that the data to be furnished with the return of income was not complete. It appears that no formal order was made in writing by the Income-tax Officer on this application. However, on September 29, 1967, the assessee made another application that it had to file return of its income for S. Y. 2022 on or about 30th September, 1967, but as the data to be furnished along with the return was still not complete, it was prayed that the time for furnishing return be extended up to 31st December, 1967. This application for adjournment was forwarded to the Income-tax Officer under the cover of letter of the chartered accountant of the assessee-firm of the same date. It appears that the Income-tax Officer has made an endorsement on the said covering letter that the time for furnishing return was extended up to 15th November, 1967. The assessee could not file its return within the time granted by the Income-tax Officer but filed it as a matter of fact on December 23, 1967. The Income-tax Officer completed the assessment on 26th May, 1969, under section 143(3) of the Income-tax Act, 1961, and determined the total in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for two obvious reasons; firstly, because we do not think that there is any scope for debate in view of the decision of this court in Dalwadi Company v. Commissioner of Income-tax (Income-tax Reference No. 54 of 1972, decided on December 17, 1973), by a Division Bench consisting of Divan C.J. and T. U. Mehta J: and, secondly, because on a plain reading of clause (iii) of the proviso to section 139(1)(b), there is no scope for contending, much less upholding, that there can be possibly some debate on the scope of the said proviso which has, by clause (iii), enjoined levy of penal interest in the case of an assessee failing to furnish return before the maximum date extended under clause (i) or (ii) of the said proviso. The Division Bench of this court in Dalwadi's case was concerned with the same provision. The facts in that case were that the Income-tax Officer had omitted to charge interest for the late submission of the return for the assessment year 1962-63. The assessee was a registered firm and the notice under section 139(2) along with the form of return of income was served on the assessee on September 12, 1962, and the return of income for the said assessment year was fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 139(1) of the Income-tax Act. The Division Bench, speaking through Divan C.J., observed in this context as under: "Therefore, it is apparent that the obligatory levying of penal interest under section 139 was omitted by the Income-tax Officer and the procedure laid down in section 139(8) and rule 117A was not followed. Even if, therefore, the provisions of section 139 and rule 117A were held to be retrospective and were held to be applicable to the case of the assessee, the Income-tax Officer at the time of the original assessment order bad not waived penal interest within the meaning of rule 117A. Hence, non-waiving of penal interest was consequently an error apparent on the face of the record and rectification provisions of section 154 could clearly be invoked by the Income-tax Officer." The Division Bench further observed in Dalwadi's case that waiver or reduction of penal interest payable under the provisions of section 139 can be carried out by the Income-tax Officer in such cases and under such circumstances as may be prescribed. Rule 117A says that the Income-tax Officer may reduce or waive interest payable under section 139 in the cases and under the circumstances me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in appeal before the Tribunal, it was held that the mistake sought to be rectified by the Income-tax Officer was not a mistake apparent from the record since the Income-tax Officer should be deemed to have exercised his discretion in the matter of condoning the delay when in the original assessment order he gave deduction on that count. On a reference at the instance of the revenue, the Division Bench considered the provisions contained in clause (a) of the scheme which empowered the Income-tax Officer to condone delay subject to certain conditions and in certain cases and observed--See [1976] 102 ITR 584, 589 (Guj): "In our opinion, the contentions of the revenue should prevail. It is an admitted position that there is no necessity of any detailed investigation in this matter so far as the question of exercise of discretion of the Income-tax Officer under the proviso to sub-section (2) of section 280C is concerned, because it is common ground between the parties that no application in the prescribed form as required under sub-paragraph (2) of clause 4 of the scheme of 1966 was made before the Income-tax Officer for condoning the delay. The Income-tax Officer concerned has also n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... three important conditions subject to which the discretion is to be exercised by the Income-tax Officer. If those conditions were wanting it cannot be successfully urged, much less accepted, that that discretion was in fact exercised by the Income-tax Officer concerned" ([1976] 102 ITR 584, 592 (Guj)). In view of this settled position, so far as this court is concerned, we do not think that the Tribunal was right in taking the view that there is a judicial divergence on the question as to under what circumstances the proviso to section 139(1) is attracted. In view of the decision in Dalwadi's case it cannot be urged that there is scope for debate as to when the proviso and especially clause (iii) is attracted. On a plain reading of clause (iii) it is clear to us that there is an obligation on the Income-tax Officer to levy penal interest in the manner contemplated under sub-clauses (a) and (b) of the clause if the assessee fails to furnish his return before the maximum date as extended under clause (i) or (ii) of the proviso. It is no doubt true that under sub-section (8) of section 139 the Income-tax Officer has in certain cases and under certain circumstances prescribed under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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