Charging interest under Section 139 of the Income Tax Act, 1961, creates a presumption of extension of time for filing the return, and subsequent waiver of interest by the Commissioner does not negate this presumption.

( 1 ) THIS reference arises out of the assessment of M/s. Dooars Transport, the assessee, for the assessment years 1964-65, 1966-67, 1967-68, 1968-69 and 1969-70, the relevant accounting periods ending on 30th June of the calendar years 1963, 1965, 1966, 1967 and 1968. Under Section 139 of the Income-tax Act, 1961, as it stood at the relevant time, the assessee was required to file his returns for the said assessment years by 30th June of the calendar years 1964, 1966, 1967, 1968 and 1969. The assessee failed to do so. For the assessment year 1966-67, the assessee filed an application on September 30, 1966, praying for an extension of time by three months for submission of the returns, It is on record that no order was communicated to the assessee in respect of the said application. In respect of the assessment year 1968-69, time to file the return was extended till December 31, 1968, and for the assessment year 1969-70, such time was extended till June 30, 1970. The assessee could not file the returns in respect of the said three assessment years even during the extended time.

( 2 ) THE assessee filed returns for the said assessment years respectively on June 30, 1965, December 27, 1967, December 27, 1967, February 3, 1970 and February 11, 1971.

( 3 ) IN making the assessments, the Income-tax Officer charged interest under Sub-sections (1) and (8) of Section 139 of the Act. The Income-tax Officer also issued notices to the assessee to show cause why penalty should not be imposed on the assessee for late filing of the returns under Section 271 (1) (a ).

( 4 ) THE assessee contended before the Income-tax Officer that it had a large number of branches exceeding 100 throughout India as also a branch in Nepal. Each of the said branches maintained separate accounts and it took a long time to finalise the accounts. The assessee contended further that at the relevant time, a number of employees of the assessee working in its accounts department were either ill or on leave. The turnover of the assessee was huge and by reason of the delay in finalisation of the accounts for one year, caused, in turn, delay in filing of the accounts for the subsequent years. The assessee also contended that the returns were filed before the assessments were completed and should be treated as returns filed within time. The Income-tax Officer did not accept the contention of the assessee and in respect of each of the said years imposed a penalty.

( 5 ) BEING aggrieved, the assessee preferred appeals before the Appellate Assistant Commissioner. It was contended on behalf of the assessee in the appeals for the first time that inasmuch as the Income-tax Officer has charged interest under Section 139 of the Act, it must be presumed that he had extended the time for filing the return in each of the said years till the dates up to which interest was charged. The other contentions made before the Income-tax Officer were reiterated before the Appellate Assistant Commissioner. It was also contended that the assessee did not act in deliberate defiance of law or consciously disregarded its statutory obligations and no mens rea was established by the Income-tax Officer for which penalty could be levied.

( 6 ) THE Appellate Assistant Commissioner did not accept the contentions of the assessee. He held that the assessee was conscious of its obligation to file the returns within time and in respect of several assessment years such applications had been filed. In the years where such applications were not filed, it was held that if there was any real difficulty for the assessee to file its returns in time, it would have certainly applied for extension of time and the fact that no extension of time was applied for indicates that there was no genuine difficulty for the assessee to file its returns in time. The Appellate Assistant Commissioner rejected the appeals of the assessee by two separate orders passed in respect of the assessment years 1964