COMMISSIONER OF INCOME-TAX VS M. J. DAVEDA, 1992 PTD-SUPREME-COURT-INDIA 391 (1990)

(Civil Appeal No.402 of 1976 was by special leave from the judgment and order dated September 25, 1975, of the Andhra -Pradesh High Court in I.T.R. No.191 of 1974).

Income-tax---

----Penalty---Return filed beyond time---Interest levied by Income-tax Officer for period of delay amounts to granting time to file return---No penalty leviable ---Question of quantum of penalty will not arise.

Where the assessee files the return of income beyond the prescribed time, by the levy of interest for the period of delay under section 139 of the Indian Income-tax Act, 1961, the Income-tax Officer must be deemed to have granted time up to the date of filing of the return and penalty under section 271(1)(a) would not be leviable. And it would be a meaningless exercise to consider whether the penalty leviable under section 271(1)(a) of the Indian Income-tax Act should be with reference to the net tax remaining due and payable after deduction of the tax paid under section 140-A or section 141.

C.I.T. v. M. Chandra Sekhar (1985) 151 IM 433 (SC) fol.

C.I.T. (Addl.) v. MJ. Devda (1977) 109 ITR 484 affirmed.

B.B. Ahuja and Ms. A. Subhashini, Advocates for Appellant.

K. Ram Kumar, Mrs. Anjani and Mrs. Janaki Ramachandran, Advocates for Respondents.

ORDER

These appeals have arisen against similar orders of the High Court of Andhra Pradesh (C.I.T. (Addl.) v. MJ. Devda (1977) 109 ITR 484) failing to be persuaded, the Income-tax Appellate Tribunal beforehand, to refer the following three questions of law to the High Court said to arise from the appellate orders of the Income-tax Appellate Tribunal, Hyderabad. Those questions are taken and reproduced below from one case and in the others they are substantially the same (see (1977)109 ITR 484, 486);

"(1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that, by the levy of interest under section 139 of the Income-tax Act, 1961, the Income-tax Officer must be deemed to have granted time up to the date of filing the return of income?

(2) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was correct in holding that even if the return was treated as filed under section 139(4), penalty was not leviable?

(3) Whether, on the facts and in the circumstances of the case, the penalty leviable within the meaning of section 271(1)(a) shall be with reference to the net tax remaining due and payable at the date of final assessment after deduction of the tax paid under section 140-A/141?"

Learned counsel for the parties are agreed that the answer to question No.(1) would be against the Revenue and in favour of the respondent-assessee on the ratio of C.I.T. v. M. Chandra Sekhar (1985) 151 ITR 433 (SC) and thus would not be required to be referred. If this is so, as it has to be, the attempt to A have question No.(3) alone referred in isolation of the answer to question No.(1) is a meaningless exercise because, if the Income-tax Officer must be deemed to have granted time from the date of filing the return of income, which power he undoubtedly had, the question of levying any penalty under section 271(1)(a) on the basis of failure to furnish return within time would, in no event, arise under the Income-tax Act, 1961.

In this view of the matter, there is nothing to say further in these appeals which, accordingly, are dismissed. In the circumstances of the cases, there shall be no order as to costs.

M.BA./1237/TAppeals dismissed.