A return filed in pursuance of a notice issued under Section 148 of the Income-tax Act, 1961 is not a return filed under Section 139(2) of the Act and, therefore, interest is not payable for late filing of return under Section 147.

N.K.Sodhi, J.

1. The assessment years in question are 1968-69 and 1969-70. The assessee-firm did not file returns of its income for these years within the time allowed under Section 139(1) of the Income-tax Act, 1961 (for short, "the Act"). These returns could be filed up to June 30, 1968, and June 30, 1969, respectively. The assessee filed applications on September 30, 1969, seeking extension of time up to December 31, 1969, for filing the returns for both the years. The Income-tax Officer did not pass any order on the applications and no further application for extension was received from the assessee nor did it file the returns for the two years. The Income-tax Officer issued notices on July 12, 1971, under Section 148 of the Act for the assessment years in question which were served upon the assessee on September 22, 1971. These notices were issued on the assumption that its income had escaped assessment on account of its non-filing of the returns within the time prescribed under Section 139 of the Act. The assessee thereafter filed the returns on March 17, 1973, and the assessment for both the years was framed on March 30, 1973, under Section 147 of the Act. The Income-tax Officer also levied interest of Rs. 5,325 and Rs. 5,556 for the two years, respectively, for late filing of the returns. The assessee then filed applications under Section 154 of the Act with a request to delete the interest charged as according to it, the same was not chargeable. These applications were rejected and the Income-tax Officer held that the charging of interest was in order. Being aggrieved by the order of the Income-tax Officer dismissing the application for rectification under Section 154 of the Act, the assessee filed two appeals before the Appellate Assistant Commissioner who upheld the order of the Income-tax Officer and observed that the returns filed by the assessee were not under Section 139(1) of the Act as they had not been filed by June 30, 1968, and June 30, 1969. He further observed that the returns could not be deemed to have been filed under Section 139(2) read with Section 148 of the Act as these were not filed within the time allowed by notices issued under Section 148 of the Act. It was pointed out that the returns could be treated to have been filed under Section 139(4) of the Act and this section duly provided for the charging of interest. The assessee filed second appeal before the Income-tax Appellate Tribunal, Chandigarh. The Tribunal held that the returns in question had neither been furnished within the period prescribed under Section 139(1) nor under Section 139(4) of the Act and, therefore, interest was not leviable. It accepted the assessees appeals holding that the mistake committed by the Income-tax Officer was apparent from the record and that the assessee was not liable to pay interest and that the applications under Section 154 of the Act deserved to be allowed. The rectifications sought by the assessee were thus directed to be made. On an application filed by the Department under Section 256(1) of the Act, the Tribunal declined the reference as, according to it, no question of law arose from its decision. The petitions filed by the Revenue under Section 256(2) of the Act were allowed by this court and the Tribunal has referred the following two questions of law for our opinion ;

" 1. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in ignoring the fact that the return was filed after the issue of notice under Section 148 of the Income-tax Act which contained all the requirements of a notice under Section 139(2) including the provision of charging of interest for delay in filing the returns ?

2. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the question involved in this case regarding the charging of interest was not a debatable point and hence not beyond the scope of Section 154 of the Income-tax Act ?"

2. We