The legislature is entitled to treat registered firms as unregistered for the purpose of imposing interest on late filing of returns, as a measure to compensate the revenue for the loss suffered due to the assessee's default.

B.S.Dhillon, J.

1. The constitutional validity of Expln. 2 to Sub-section (8) of Section 139 of the Income-tax Act, 1961 (hereinafter referred to as " the Act "), is sought to be challenged in this writ petition on the ground that it is violative of Article 14 of the Constitution of India. It may be pointed out that the petitioner is a firm registered under Section 185(1)(b) of the Act. For the assessment year 1974-75, regular assessment was made. In addition, the ITO raised a further demand on account of interest under Section 139(8) of the Act treating the petitioner firm as unregistered for the reason that whereas the return was due to be filed by the petitioner on 30th June, 1974, under Section 139(1) of the Act, it was actually filed on 13th September, 1974. Assessees application for the waiver of interest was rejected by the ITO. Its revision before the Commissioner of Income-tax was also dismissed. The said orders of the I.T. authorities are sought to be impugned in this petition on the sole ground that Expl. 2 to Sub-section (8) of Section 139 of the Act is ultra vires Article 14 of the Constitution.

2. The provisions of Sub-section (8) of Section 139 of the Act are as follows:

" 139. (8) (a) Where the return under Sub-section (1) or Sub-section (2) or Sub-section (4) for an assessment year is furnished after the specified date, or is not furnished, then [whether or not the Income-tax Officer has extended the date for furnishing the return under Sub-section (1) or Sub-section (2)], the assessee shall be liable to pay simple interest at twelve per cent, per annum, reckoned from the day immediately following the specified date to the date of the furnishing of the return or, where no return has been furnished, the date of completion of the assessment under Section 144, on the amount of the tax payable on the total income as determined on regular assessment, as reduced by the advance tax, if any, paid, and any tax deducted at source: Provided that the Income-tax Officer may, in such cases and under such circumstances as may be prescribed, reduce or waive the interest payable by any assessee under this sub-section.

Explanation (1).--For the purposes of this sub-section, specified date , in relation to a return for an assessment year, means,-- (a) in the case of every assessee whose total income, or the total income of any person in respect of which he is assessable under this Act, includes any income from business or profession, the date of the expiry of four months from the end of the previous year or, where there is more than one previous year, from the end of the previous year which expired last before the commencement of the assessment year, or the 30th day of June of the assessment year, whichever is later;

(b) in the case of every other assessee, the 30th day of June of the assessment year.

Explanation (2).--For the purposes of this sub-section, where the assessee is a registered firm or an unregistered firm which has been assessed under Clause (b) of Section 183, the tax payable on the total income shall be the amount of tax which would have been payable if the firm had been assessed as an unregistered firm.

(b) Where as a result of an order under Section 154 or Section 155 or Section 250 or Section 254 or Section 260 or Section 262 or Section 264, the amount of tax on which interest was payable under this sub-section has been reduced, the interest shall be reduced accordingly, and the excess interest paid, if any, shall be refunded. "

3. Reference at this stage may also be made to the provisions of Section 271(2), which are as follows:

"271. (2) When the person liable to penalty is a registered firm or an unregistered firm which has been assessed under Clause (b) of Section 183, then, notwithstanding anything contained in the other provisions of this Act, the penalty imposable under Sub-section (1) shall be the same amount as would be imposable on that firm if that firm were an unregistered firm."

4. It has