Law:

Section:

Section 139(8) of the Income-tax Act, 1961 - Return of Income - Interest for late filing of return - Assessment year 1964-65 - Whether subjecting registered firms to same treatment as unregistered firms in matter of levy of interest for late filing of return can not be said to be in any way arbitrary or colourable exercise of legislative powers - Held, yes - Whether registered firms having been treated as unregistered firms under proviso (iii) to section 139(1) and subjected to levy of interest, they should not be subjected to further disadvantage by denying them benefit of deduction of advance tax paid or amount of tax deducted at source - Held, yes FACTS The petitioner was partnership firm and it had been granted the status of a registered firm. The firm submitted its return of income for the relevant assessment year under section 139(1), after obtaining extension of time from the respondent. On the basis of the said return the respondent determined the total income and the tax payable thereon. In the said order of assessment the respondent also determined the interest payable by the firm under section 139. The said interest had been calculated at 6 per cent on the total income treating the firm as an unregistered firm as per provisio (iii)(a ) of section 139. The petitioner filed the writ petition challenging the said assessment so far as it related to the levy of interest on grounds: (1) the proviso (iii)( a) to section 139(1) enabling the ITO to treat the registered firm as an unregistered firm while calculating the interest payable by the firm was arbitrary and ultra vires being a colourable exercise of the legislative power; (2) the proviso (iii)( b) to section 139(1) which allows deduction of the advance tax paid for purposes of the levy of interest in respect of other assessees, has not been extended to registered firms and this clearly amounted to discrimination violative of article 14 of the Constitution. HELD Proviso to section 139(1) at the stage of the Bill was to the effect that the interest at 6 per cent per annum shall be payable on the amount of tax that may be found due on completion of the regular assessment from the first day of October of…

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