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Judgment
This reference is u/s 256(1) of the Income Tax Act, 1961, 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 u/s 139(8) is chargeable treating the firm as an unregistered firm in a case where no tax is payable by the firm as a registered firm, while Explanation (2) to Sub-section (8) of Section 139 clearly speaks of determination of tax payable treating the firm as an unregistered firm for charging interest u/s 139(8)?"
The relevant, assessment year is 1977-78. The assessee i.s a registered firm. After taking into account the advance tax paid by the assesses and the tax deducted at source, no tax was payable. However, the Income Tax Officer charged interest u/s 139(8) of the Income Tax Act, 1961, for late submission of the return. The assessee disputed its liability for payment of interest. In the appeal filed before the Commissioner of Income Tax (Appeals), the assessee''s contention was accepted by the Commissioner of Income Tax. The Tribunal has upheld the view of the Commissioner of Income Tax. Hence, this reference at. the instance of the Revenue.
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 whore the advance tax covers the entire amount of tax assessed by the income tax: Officer under the Income Tax 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 Tribunal''s 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 Tribunal''s view is justified. No costs.