Law: Income Tax Act, 1961

Section: 37,139

(a) Income-tax----Return---Advance tax---Interest---Notice---Delay in filing return and in paying advance tax---Notice not necessary before levy of interest---Indian Income Tax Act, 1961, S.139. The duties of an assessee are amply made known by several provisions of the Act with which the assessee is required to comply. Filing a return in time and paying advance tax to the extent required and within time are obligations laid down in the Act itself. The assessee is also made aware of the fact that failure to do so will result in his being made liable for payment of interest. The fact that power is conferred on the authorities to reduce or waive the interest, if the petition is filed for that purpose before the appropriate authority cannot have the effect of compelling the authority to give a show-cause notice before adding interest and to make a separate order for the levy of interest. The provisions made' in the rules enabling the assessee to apply for reduction and the provision in the Act enabling the assessee to seek waiver from the Commissioner are provisions made with a view to enable the assessee to secure relief if the amount of interest added is high or the amount in the circumstances which the assessee may demonstrate before the Commissioner are circumstances recognised under the -Act as relevant for granting reduction on waiver. (b) Income-tax----Business expenditure---Guest house---Maintenance of transit house--­Tribunal finding that transit house was in fact a guest house---Expenditure on maintenance not allowable---Indian Income Tax Act, 1961, S.37. Finding of the Tribunal was that the so-called transit house was in fact a guest house and, therefore, the expenditure; incurred for its maintenance were not allowable. M.B. Brothers v. CIT (1985) 154 ITR 695 (AP) and Central, Provinces and Manganese Ore Co. Ltd. v. CIT (1986) 160 ITR 961 (SC) ref. JUDGMENT R. JAYASIMHA BABU, J.---The assessee has incurred liability for payment of interest by reason of delay in filing the return and not paying the advance tax in time. While making the assessment accordingly interest was added. The assessee's grievance is that before adding interest, the assessee should…

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