COMMISSIONER OF INCOME TAX, ANDHRA PRADESH versus M. CHANDRA SEKHAR

Citation: [1985] 2 S.C.R. 215 · Decided: 04-12-1984 · Supreme Court of India · Bench: V.D. TULZAPURKAR · Disposal: Dismissed

Judgment (excerpt)

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• 
215 
COMMISSIONER OF INCOME TAX,ANDHRA PRADESH 
v. 
M. CHANDRA SEKHAR 
December 4, 1984 
[V.D. TULZAPURKAR AND R.S. PATHAK, JJ.J 
Income Tax Act, 1961. 
Section 139(1) read with proviso-In a case 
where Income Tax Officer levies interest on income tax return.filed after the date 
prescribed by sub-s.(1) of s.139-whether a valid presumption can be raised that 
lucome Tax Officer extended time for filing voluntary return under the proviso to 
Sub. s.(/)ofs.139. 
Section 21 l(J)(a)-Scope of- Whether penalty can be levied on incom~ tax 
A 
B 
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return filed aft~r the date prescribed by s.139(1) but on which Income Tax Officer 
D 
has levied interest under c/.(iii) of the proviso. Held-No. The time allowed by 
Income Tax Officer under proviso to Sub-s.(1) of s. 139 for filing return falls 
within the expression "the time allowed'' in cl.(a) of Sub-s.(l) ofs.271. 
Sub·s.(I) of s.139 of the Income Ta. Act, 1961 prescribes the period 
within which a volu~tary income tax return must be filed. When an assessee 
cannot file a return within the prescribed period, the proviso to Sub·s.O) of 
s.139 entitles the assessee to make an application for extension of time in the 
prescribed manner and the form stating the reasons on which the extension of 
time is sought. On such an applk.ation being made, the Income Tax Officer is 
empowered to extend the per'.od for filing the income tax return subject to 
payment of interest on the amount of tax payable. 
The respgndent assessee filed voluntary income tax returns for some 
assessment years after the date prescribed by Sub-s.(l) of s.139 of the Income 
Tax Act, 1961. The Income Tax Officer treated the asses.sec as being in default 
and imposed penalties under cl. (a) of Sub-s.(I) of s.271 of the Act. In appeal 
before the Appellate Assistant Commissioner of Income Tax the assessee con .. 
tended that since interest had been levied under c1.(iii) of the proviso to Sub·s. 
(I) of s.139, no question arose of imposing a penalty. The Appellate Assistant 
Commissioner reje<:ted the contention. In second appeal the Income Tax 
Appellate Tribunal held that as the Income Tax Officer had levied interest upto 
the-date of the filing of the returns, it must be presumed that the Income Tax 
Officer had extended the time for filing the returns after satisfying himself that 
it was a case for extension or time. The Appellate Tribunal allowed the appeals 
and cancelled the penalties. On a reference being made, the High Court held 
that the Appellate Tribunal was justified in relying upon the presumption. 
Hence these appeals by the R•venue. The Revenue contended that there was 
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F 
G 
u 
A' 
B 
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D 
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ll 
216 
SUPREME COURT REPORTS 
(1985J 2 S.C.R. 
no material to warrant the finding that an application had made by the assessee 
for extension of time and that upon such application the Income Tax Officer 
extended the time. The Revenue urged that the imposition of interest does not 
warrant the assumption that an application for extension of time was made by 
the assessee and allowed by the Income Tax Officer. 
Dismissing the appeals, 
HELD : It cannot be disputed that the Income Tax Officer could extend 
the date for furnishing the return in respect of each assessment year. It was 
open to him to do so under the statute, and he was entitled to charge interest 
only on the basis that the extended period feH beyond September 30 or 
December 31, as the case may be. In the ordinary_ course of things, the Income 
Tax Officer could have extended the date only upon being satisfied ~that there 
was good reason for doing so, and that would have been on grounds pleaded by 
the assessee. We consider that in the circumstances of this case a presumption 
could validly be raised that all that was done. No attempt was made by the 
Revenue to show that the Income Tax Officer acted arbitrarily and contrary 
to the procedure envisaged by the statute. The Appella:e Tribunal considered 
the matter carefully and found circumstances on the record in favour of raising 
the presumption. The High Court approved of the approach adopted by the 
Appellate Tribunal and did not find it contrary to law. 
We do not see any 
reason to differ from the opinion expressed by the High Court. [221E·G] 
Additio"nal Commis~ioner of Income Tax, Gujarat v. Santosh Industries, 
(1974] 93 l.T.R. 563, M. Nagappa and Others v. Income Tax Officer, Central 
Circle·!, Bangalore and Others, [1975] 99 I.T.R. 32, Poorna Biscuit Factory v

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