TMI Blog1976 (8) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... ) were also served on 24th August, 1962, 27th August, 1963, and 18th July, 1964, for the three assessment years, respectively. However, the return of income was filed on March 23, 1963, in respect of the assessment year 1962-63. The Income-tax Officer completed the assessments for the assessment years 1962-63, 1963-64 and 1964-65 (sic) for non-compliance of notices under sections 143(2) and 142(1) for all the three years and also for non-compliance of notices under section 139(2) for 1963-64 and 1964-65. It appears that the Income-tax Officer proceeded under section 144 in assessments made for the years 1963-64 and 1964-65. Returns of income for assessment years 1963-64 and 1964-65 were filed on August 16, 1965, after the assessment under section 144 had been completed. Oa an appeal filed by the assessee the Appellate Tribunal directed the Income-tax Officer to reframe the assessments in accordance with law cancelling the best judgment assessment. After the decision of the Tribunal, when the assessments were being made afresh for the three years under reference the Income-tax Officer charged interest (what is popularly known as penal interest) under section 139 for the delay in fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there may be conceivably two opinions. A decision on a debatable point of law is not a mistake apparent from the record. At page 53 of the report Hegde J., speaking for the court, observed : " It is clear that the question whether section 17(1) of the Indian Income-tax Act, 1922, was applicable to the case of the first respondent is not free from doubt. Therefore, the Income-tax Officer was not justified in thinking that on that question there can be no two opinions. It was not open to the Income-tax Officer to go into the true scope of the relevant provisions of the Act in a proceeding under section 154 of the Income-tax Act, 1961. A mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there may conceivably be two opinions. As seen earlier, the High Court of Bombay opined that the original assessments were in accordance with law though in our opinion the High Court was not justified in going into that question." The Supreme Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther Division Bench consisting of Chinnappa Reddy and A. D. V. Reddy JJ. in R.C. No. 81 of 1970 [Commissioner of Income-tax v. M. Manik Rao [1977] 109 ITR 580 (AP) (Appendix)] decided on 17th December, 1971. The same principle was reiterated by Chinnappa Reddy J., delivering the judgment of the Division Bench, as follows : " Since interest was not chargeable unless time had been extended, the Tribunal was justified in holding that time must have been extended on the application of the assessee. " In the earlier portion of the judgment he has also reiterated : " Since interest is chargeable under the third clause of the proviso only when the Income-tax Officer extends the time for the furnishing of the return on the application of the assessee, the Appellate Tribunal presumed that there must have been an application by the assessee and that the Income-tax Officer must have extended the time for filing the return. The Tribunal thought that it was justified in drawing such a presumption as the correct state of facts was not clear from the records of the case which were available to them. We cannot say that the Tribunal erred in drawing such an inference. " Obul Reddi J. (as h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n him to submit a return before a particular date. Therefore, the case where no returns were filed stands on a different footing from a case where returns were filed, pursuant to a notice issued by the Income-tax Officer under section 148." It is true, as Sri M. J. Swamy appearing for the assessee pointed out, that in the instant case the rectification application was made by the assessee before July, 1971, which was the last date for filing the application under section 154. It is also true, as he emphasised, that the decision of Obul Reddi J. (as he then was) in Progressive Engineering Co. v. Income-tax Officer [1976] 105 ITR 226 (AP) was delivered on July 11, 1976, and, therefore, at the time when the rectification application first came up before the Income-tax Officer some time before July, 1971, there was no question of the department relying upon the decision of Obul Reddi J. (as he then was). However, it must be pointed out that the ground on which Obul Reddi J. (as he then was) distinguished the decision of the Division Bench in Kishanlal Haricharan's case [1971] 82 ITR 660 (AP) could have been urged as a ground for distinguishing the decision in the Division Bench's r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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