Interest under S.139(1)(iii) of the Income Tax Act is payable when a person files a return after the due date but within the period specified in S.139(4)(b)(ii) without applying for an extension of time, as interpreted by the court to promote the purpose and object of the Act.

1. In the case of a person who has not furnished return within time allowed to him under sub-Ss. (1) or (2) of S.139 of the Income Tax Act, if he furnished the return subsequently before the end of the period specified in clause (b) of S.139 (4) of the Income-tax Act is he liable to pay the interest contemplated by sub-clause (iii) of the proviso to sub-section (1) of S.139 of the Act? This is the question that arises for decision in this case. On this question different views have been expressed by the High Courts in India.

2. The petitioner in this case is a firm. It is an assessee to income-tax. The petitioner filed his return of Income for the assessment year 1968-69 only on 28-6-1969 though it was due on 30-6-1968. That there was delay in filing the return was not noticed at the time of assessment for the assessment year 1968-'69. Later it was noticed by the Commissioner of Income-tax who took up suo mote revision. He held that the assessment was erroneous in so far as the assessing authority had failed to levy interest under S.139 of the Act, and therefore the matter was remitted to the Income-tax officer to enable him to deal with the case in regard to the levy of interest. Pursuant to this the Income-tax Officer passed Ext. P-3 order on 26-2-1973. In this he held that the return that ought to have been filed on 30-6-1968 was filed only on 28-6-1969 and there was no sufficient reason for the late filing of the return. Hence he levied interest of Rs. 6515 under S.139 (1) (iii) of the Act. The petitioner took up the matter in appeal before the Appellate Assistant Commissioner of Income tax The latter allowed the appeal. This was reversed by the Income-tax Appellate Tribunal, Cochin Bench before whom the Department took up the matter in further appeal. The reversal of the appeal was on the ground that the Appellate Assistant Commissioner had no jurisdiction to entertain the appeal against the levy of interest. The petitioner has challenged Ext. P-3 order before this Court in these proceedings.

3. That the petitioner was bound to file return under S.139 (1) in this case is not disputed. But he did not file the return. He also did not file return under S.139 (2) of the Act. He filed return within the period of 3 years contemplated under S.139 (4) (b) (ii) of the Act and that was without applying for any extension of time. In other words, the return was filed within the period specified in clause (b) of sub-section (4) of S.139 and the assessee had not made any application to the officer earlier to extend the date of furnishing the return. Whether in such a case interest contemplated by clause (iii) to the proviso to sub-section (1) of S.139 of the Act could be levied is the question which I have to deal with here. It is useful here to refer to subsection (4) (a) of S.139 of the Act. That reads:

"(4) (a) Any person who has not furnished a return within the time allowed to him under sub-section (1) or sub-section (2) may before the assessment is made, furnish the return for any previous year at any time before the end of the period specified in clause (b), and the provisions of clause (iii) of the proviso to sub-section (1) shall apply in every such case."

It may also be necessary to refer to S.139(1). That obliges every person, if his total income or the total income of any other person in respect of which he is assessable under the Act during the previous year exceeded the maximum amount which is not chargeable to income-tax, to furnish a return of his income or the income of such other person during the previous year in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed within the time specified in that subsection. The proviso to that sub-section is relevant and I am quoting it here:

"Provided that, on an application made in the prescribed manner, the Income tax Officer may, in his discretion, extend the date for furnishing the return

((1) in the cas