D.B. Navalgundkar and Co. vs Commissioner of Income Tax, Mysore

Govinda Bhat, C.J.—The Income Tax Appellate Tribunal, Bangalore Bench, has stated a case and referred for the opinion of thus court the following question of law :

"On the facts and circumstance of the assessee''s case, when interest u/s 139 has been charged whether the Income Tax Officer was competent to levy any penalty u/s 271(1)(a) of the Income Tax Act, 1961 ?"

No further facts are necessary as the question referred in self-evident. The contention of the assessee is that when interest u/s 139 of the Act has been charged, it is not commented for the Income Tax Officer to levy penalty u/s 271(1)(a) of the Act. No Provisions of the Act has been brought to our notice which says that the two levies are alternative and not cumulative. When the Act does not state that where there is a levy u/s 139, no penalty can be levied u/s 271(1)(a) of the Act, the Income Tax Officer is competent to levy the penalty. That is also the view taken by the Andhra Pradesh High Court in T. Venkata Krishnaiah and Co. v. Commissioner of Income Tax. We are in respectful agreement with the opinion of the Andhra Pradesh High Court on the said question.

Before the Madras High Court, the constitutional validity of the provision for levy of penalty when interest is charged was challenged in Express Newspapers (P.) Ltd. v. Income Tax Officer. The challenged was repelled and the constitutional validity of the provisions of section 271(1)(a) was upheld.

Accordingly, we answers the question referred in the affirmative and against the assessee.

No costs.

Question answered in the affirmative.