Madras High Court
Ravi Steel Corporation vs Income-Tax Officer And Other. on 3 October, 1989
Equivalent citations: (1991)82CTR(MAD)9, [1991]187ITR684(MAD)
JUDGMENT
BAKTHAVATSALAM J. - The petitioner challenges the levy of penalty under section 271(1)(a) of the Income-tax Act, 1961, as confirmed by the Commissioner of Income-tax in revision under section 264 of the Act.
Notice of motion was ordered by S. Ramalingam J. on July 21, 1989.
Mr. C. V. Rajan, Government Advocate, appears for the Department. He points out the amendment made to section 139 of the Income-tax Act under the Taxation Laws (Amendment) Act. 1970, with effect from April 1, 1971. Under the amended provision, the levy of interest is automatic unlike the provision as it was before the amendment. Therefore, In my view, the decision reported in CIT v. M. Chandra Sekhar (1985) 151 ITR 433 (SC) is not applicable to the facts of the present case. The assessment year in this case is 1981-82 to which the amended section applies.
Mr. R. Janakiraman, learned counsel for the petitioner, relies on the decision reported in Ajit Singh Rais v. CIT (1988) 174 ITR 418 (Gauhati). I find from the facts of that case, that that case related to the assessment years 1963-64 to 1967-68, as such, it will not apply to the facts of the present case.
It is well-settled that levy of interest is not penal interest in nature and in appropriate cases, therefore, it will be permissible for the assessing authority to levy interest besides imposing a penalty : see the decisions reported in Express Newspapers (P.) Ltd. v. ITO (1973) 88 ITR 255 (Mad) and Kodur Orange Produce Co. v. CIT (1977) 110 ITR 124 (Mad). There are no merits in the contention raised by learned counsel for the petitioner stating that once the assessing authority has extended the time, it should be presumed that penalty is not leviable. The writ petition will, therefore, stand dismissed. No Costs.