COMMISSIONER OF INCOME TAX vs AGARWAL CONSTRUCTIONS.

By the Court

This Reference is under s. 256(1) of the IT Act at the instance of the Revenue to answer the following question of law, namely :

"Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in holding that no interest under s. 139(8) is chargeable treating the firm as unregistered firm in a case where no tax is payable by the firm as Registered Firm while explanation (2) to sub-s. (8) of s. 139 clearly speaks the determination of tax payable treating the firm as an unregistered firm for charging interest under s. 139(8)."

The relevant assessment year is 1981-82. The assessee is a registered firm which filed the return late. However, on completion of the assessment, it was found that no tax was due from the assessee and in fact the assessee was entitled to refund of some amount taking into account the tax which had already been paid.

The point involved for decision is concluded by the Supreme Court decision in Ganesh Dass Sreeram Vs. Income Tax Officer, ''A'' Ward, Shillong and Others, It was held by the Supreme Court that where the advance tax covers the entire amount of tax assessed by the ITO under the IT Act, there is no question of charging the registered firm with interest even though the return is filed by it beyond the time allowed. Following this decision, it is held that the Tribunals view to the same effect is justified.

Consequently, the reference is answered against the Revenue and in favour of the assessee by holding that the Tribunals view is justified. No costs.