Govinda Bhat, C.J:— This batch of twelve writ petitions arising under the Income the Act, hereinafter called the Act, raise common question and therefore they are disposed of by a common judgment.
2. In order to appreciate the contentions urged, it is sufficient if we set out the relevant facts in writ Petition No. 916 of 1972.
3. The petitioner in writ Petition No. 916 of 1972 is a partner of the firm of Messrs M. Nagappa Contractors, Bangalore. For the assessment year 1967–1968, the firm of which the petitioner is a partner filed its return on 1st August, 1967. The firm thereafter filed a revised return on 18th October, 1969 admitting a larger income. The petitioner filed his return on 28th October, 1969. The petitioner's return was due on 30th June, 1967 under sub-section (1) of Section 139 of the Act.
4. The revised return filed by the firm was accepted and an order of assessment was made. Based on the said assessment order, the petitioner's share income was also assessed. It is relevant to state that the petitioner had no income apart from the share income from the firm.
5. The Income-tax Officer in his assessment order dated 31st October, 1969, levied interest of Rs. 2020 under section 139. Against the said order the petitioner filed a revision petition before the Commissioner of Income-tax Mysore. The revision petition was disposed of along with other revision petitions by the order dated 27th January, 1971. By the said order, the Commissioner waived the interest in respect of the assessment years 1965–1966 and 1966–1967 on the ground that the return was filed in response to notices issued under Section 148 of the Act. The prayer of the petitioner for waiver of interest for the assessment years 1967–1968 and 1968–1969 was rejected on the ground that the petitioner's representative Sri K.P Rao “has not been able to set out any convincing reasons which would constitute good and sufficient cause explaining the delay in filing the returns of income.” Aggrieved by the said order, the petitioner in Writ petition No. 916 of 1972 has preferred the above writ petition.
6. Similar writ petitions were filed by the other partners.
7. The first ground urged by Sri K. Srinivasan, learned counsel for the petitioners was that the returns filed by the petitioners were under sub-Section (4) of Section 139 of the Act and that the said returns should be deemed to be returns filed under sub-section (1) of Section 139 within the time allowed by the Income-tax Officer and therefore it should be held that there was no delay in filing the returns and consequently no interest should be charged. It is common ground that the returns filed by the petitioners of their share income were under sub-Section (4) of Section 139.
8. In support of his contention the learned counsel sought reliance on the decision of the Supreme Court in Commissioner of Income-tax Punjab v. Kulu Valley Transport Co., P., Ltd.(1) That was a case under the Income-tax Act, 1922, Grover J., who delivered the Majority judgment stated thus:—
“It can well be said that Section 22(3) is merely a proviso to Section 22(1). Thus a return submitted at any time before the assessment is made is a valid return. In considering whether a return made is within time sub-section (1) of section 22 must be read along with sub-section (3) of that section. A return whether it is a return of income, profit orgains or of loss must be considered as having been made within the time prescribed if it is made within the time specified in Section 22(3). In other words, if section 22(3)) is complied with section 22(1) also must be held to have complied with. It compliance has been made with the latter provision, the requirements of Section 22(2A) would stand satisfied.”
9. Section 22(1) of the 1922 Act corresponds to Section 139(1) of the Act: but there is no provision to charge interest in the 1922 Act. Sub-section (3) of Section 22 corresponds to sub-sections (4) and (5) of Section 139. sub-Section (4) of Section 139 contains an additional clause, namely “the provisions of clause (iii) of the proviso to sub-section (1) shall apply in every such ease” which is not found in the 1922 Act.
10. Even assuming without deciding that a return filed under sub-Section (4) of Section 139 should be deemed as a return under Section 139(1), the petitioners are liable to pay interest since the sub-section says that clause (iii) of the proviso to sub-section (1) of Section 139 shall apply to every such case. Clause (iii) of the proviso to sub-section (1) provides that interest at nine per cent per annum shall be payable from the first day of October or the first day of January, as the case may be, of the assessment year to the date of furnishing of the return. Interest has been charged on the basis of the said provision.
11. It was next urged by Sri Srinivasan that there is power in the Income-tax Officer to reduce or waive the interest payable by any person under any provision of Section 189 in such cases and under such circumstances as may be prescribed and that in the instant cases, neither the Income-tax Officer nor the Commissioner has considered the case for waiver in the light of the decision of this Court in Venkateswara Power Rolling Mills, Bangalore v. Commissioner of Income-tax Bangalore(2).
12. In the said case, it has been held by this Court that if a partner who has no income apart from the share income does not file his return within the due date, the delay in filing the return till the firm files its return should be considered as sufficient cause for not filing the return within the due date. In the instant case, it was submitted that the firm filed the return beyond the due dates and that the petitioners filed their returns within a few days after the revised returns were filed.
13. In the case of petitioner in Writ Petition No. 916 of 1972, as already stated, the firm filed its first return on 1st August, 1967. The petitioner's return was due on 30th June, 1967. The revised return of the firm was filed on 18th October, 1969. Applying the principles of the decision laid down in Venkateshwara Power Rolling Mill's case it was urged by Sri Srinivasan that a return filed on 28th October, 1969 could not be said to be a belated return.
14. It was contended by Sri Rajashekharmurthy, learned counsel for the Department, that since the firm had filed its return on 1st August, 1967 the petitioner who is a partner of the firm should have filed his return soon after 1st August, 1967. If he had filed a return on the basis of the firm's return and then filed a revised return, then it cannot be said that there was no sufficient causes for not filing the return earlier.
15. This submission for Sri Rajasekharamurthy, in our opinion, is well founded. The petitioner should have filed his return soon after the firm filed its return on 1st August, 1967, and he should have filed a revised return after the firm filed its revised return. The Commissioner has charged interest on the basis that a return was due on 30th June, 1967 and there was sufficient cause for not filing the return within 30th June, 1967. That basis of the decision of the Commissioner, in our opinion, is not right. Sri Srinivasan had, however concede that this aspect of the matter was not urged before the Commissioner. But the facts are undisputed and the law as laid down by this Court is binding on the Commissioner.
16. In these circumstances, we quash the orders of the Commissioner impugned in these writ petitions so far as they relate to the levy of interest under Section 139(1) of the Act and further direct the Commissioner to consider the sufficiency of the cause for not filing the returns within the due dates in the light of the statement of the law contained in Venkateswara Power Rotting Mills' case. It is ordered accordingly. No costs.