Law:

Section:

Section 139(8) of the Income-tax Act, 1961 - Return of income - Interest for late filing of - Assessment years 1967-68 and 1968-69 - Whether prior to amendment of section 139 with effect from 1-4-1972, interest could not be charged in case of an assessee who had not filed return prior to assessment and to whom no extension of time had been granted by ITO on an application made - Held, yes FACTS The assessee filed no return of income and no application had been made for extension of time to submit the return. The ITO completed the assessment under section 144. The ITO also charged interest under section 139 for late filing of the return. On writ : HELD Prior to amendment of section 139 with effect from 1-4-1972, the interest could not be charged in the case of an assessee who had not filed the return prior to the assessment and to whom no extension of time had been granted by the ITO on an application made. That was a lacuna in the legislation as it stood. That was also an indication that at the relevant time the ITO had no power to charge interest. Therefore, the assessment order was liable to be quashed to the extent it imposed interest for non-submission of return. Note : The case was decided in favour of the assessee. JUDGMENT Sabyasachi Mukharji, J.-This is an application challenging the assessment made under section 144 of the Income-tax Act, 1961, for the assessment years 1967-68 and 1968-69. The assessee is National Hotel which runs a popular eating house in Calcutta known as Dilkusha Cabin. The assessee was represented by a receiver appointed by this court in Suit No. 890 of 1969. After the receiver took possession he found that no return had been filed for the assessment years 1967-68 and 1968-69. The receiver had received a notice under section 139(2) of the Income-tax Act, 1961. As he was unaware, of the true position he applied for time to enable him to deal with the notice. The receiver, thereafter, found that no return had been filed nor any application had been made for extension of time to submit return. The receiver also did not file any application for extension of time to file return. These facts are not in dispute. Thereupon, the petitioner…

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