Income-tax---

----Return---Delayed return or no return---Levy of interest under S.139(8)-- Interest can be levied when reassessment is made---Indian Income-tax Act, 1961, Ss.139 & 148---Constitution of India, Art.226.

Section 139(8) of the Indian Income-tax Act, 1961, does not prohibit levy of interest when reassessment is made. It also does not specifically mention that levy of interest can be made only during the course of regular assessment. Interest can be levied under section 139(8) either in the course of regular assessment or in any other proceedings including reassessment.

P. Balachandran for Petitioner. P.K.

Ravindranatha Menon for Respondents.

JUDGMENT

The petitioner is an unregistered firm doing abkari business. For the assessment year 1973-74, the petitioner's assessment was completed by the second respondent by order, dated March 31, 1976, on a total income of Rs.1,14,000 as evidenced by Exhibit P.1. Later, the third respondent initiated reassessment proceedings after issuing notice under section 148 of the Income-tax Act. He completed the reassessment under section 143(3) read with section 147(a) by order, dated November 22, 1981, and withdrew the sales tax liability of Rs.82,376 allowed in the original assessment on the ground that the petitioner did not make any provision in the accounts towards liability for sales tax and had also disputed the liability. The reassessment order is Exh.P.2. While completing Exh.P.2 reassessment order, the third respondent added interest under section 139(8) and interest under section 217 amounting to Rs.43,628 and Rs.49,860, respectively. No interest under section 139(8) or section 217 was levied as per the original assessment.

The petitioner filed an appeal before the Commissioner of Income-tax (Appeals), Calicut, against the reassessment order disallowing the sales tax liability of Rs.82,376. The appellate authority allowed the appeal partly and directed deduction of the correct amount of sales tax liability of Rs.79,688. Exhibit P.3 is the order.

The petitioner filed a petition before the Inspecting Assistant Commissioner of Income-tax, Trichur, for cancelling the interest levied under sections 139(8) and 217. Thereafter, the Income-tax Officer passed an order under section 154 for giving effect to the direction of the Inspecting Assistant Commissioner and interest under sections 139(8) and 217 was reduced to Rs.22,868 and Rs.26,135, respectively.

The petitioner preferred a revision petition, dated April 20, 1982, before the first respondent and contended that, as there was no levy of interest in the original assessment, there was no question of levying interest in the order of reassessment. That contention was rejected as per Exhibit P.7 order, Exh. P.7 is challenged by the petitioner.

Notice under section 147 was sent to the petitioner and proceedings were started on the issuance of the said notice. Section 148(1) provides that the Income-tax Officer shall serve on the assessee a notice before making the assessment, reassessment or recomputation under section 147. The reassessment was completed within time. The contention of the petitioner that, as there was no levy of interest in the original assessment, there cannot be any levy of interest in the order of reassessment has been considered in Exhibit P.7 order. It is true that interest was levied for the first time in the order of reassessment made on November 22, 1981. Section 139(8) does not prohibit levy of interest when reassessment is made. It also does not specifically mention that, levy of interest can be made only during the course of regular assessment. Interest can be levied under section 139(8) either in the course of regular assessment or in any other proceedings including reassessment. There cannot be any doubt that, under section 13 9(8), interest can be levied either in the course of regular assessment or in any other proceedings including reassessment. The contention of the petitioner that Exhibit P.7 is liable to be quashed is not tenable.

The original petition is dismissed. No costs,

M.B.A./34/T.F. Petition dismissed.