Law:

Section:

Section 139(8)(a ) of the income-tax act, 1961-Return of income-Interest for late filing of-Whether explanation 2 to section 139(8)(a), providing that for levying interest for delayed filing of return by registered firm the tax payable on total income shall be the amount of tax which would have been payable if the firm had been assessed as an unregistered firm, is violative of article 14 of the constitution of India-Held, no Facts For levying the interest under section 139(8)(a), read with Explanation 2, for the assessee's failure to file the return within the specified time, the ITO estimated the tax payable by the petitioner-firm as if the petitioner was assessed as an unregistered firm and levied interest on such notional basis. On writ, the petitioner challenged Explanation 2 to section 139(8) as being violative of article 14 of the Constitution of India. Held There is divergence of judicial opinion regarding the validity of Explanation 2 to section 139(8)(a). In M. Nagappa v. ITO [1975] 99 ITR 32 (Kar.) and in ITO v. M. Nagappa [1981] 129 ITR 516 (Kar.), it was held that the said provision was violative of article 14 of the Constitution of India. On the other hand in Mahendrakumar Ishwarlal & Co. v. Union of India [1973] 91 ITR 101 (Mad.), Ganesh Das Sreeram v. ITO [1974] 93 ITR 19 (Gauhati), Chhotalal & Co. v. ITO [1976]105 ITR 230 (Guj.) Jiwanmal Hospital v. ITO [1979] 119 ITR 439 (MP), Hindustan Steel Forgings v. CIT [1980] 121 ITR 193 (Punj. & Har.) and Mohanlal Soni v. Union of India [1983] 143 ITR 436 (Cal), it was held that the aforesaid provision is not discriminatory or void. In a common rendered in O.P. No. 6499 of 1981 (J), O.P. No. 3703 of 1982 (K) and O.P. No. 3805 of 1982 (M), dated24-4-1984, wherein the identical question came up for consideration, the said decisions were cited with approval. In view of the aforesaid preponderance of judicial opinion on the point,Explanation 2 to section 139(8)(a) could not be held to be ultra vires of article 14 of the Constitution of India, nor discriminatory or arbitrary, as contended by the petitioner. Further, the decision and the reasoning laid down by the Supreme Court in Jain Bros. v.…

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