High Court Of Kerala
Kerala State Industrial Development Corpn. Ltd. vs. Additional Commissioner Of Income Tax & Anr.
Section 140A, 234B
Asst. Year 1997-98
K. Balakrishnan Nair, J.
O.P. No. 26257 of 1999
18th October, 2006
Counsel Appeared :
Vinod Chandran K., for the Petitioner : P.K.R. Menon & George K. George, for the Respondents
JUDGMENT
K. Balakrishnan Nair, J. :
The petitioner challenges Ext. P1 order, which is a rectification order relating to the asst. yr. 199798, insofar as it directs the petitioner to pay interest for the month of December, 1997, for the reason that it paid income-tax only on 1st Dec., 1997. Normally, the petitioner should have paid the income-tax on 30th Nov., 1997. The contention of the Revenue is that since the tax was paid on 1st Dec., 1997, interest has to be charged for December also. So, for the delay of one day, one months’ interest is computed and levied. The petitioner filed a revision against it. The revision was dismissed by Ext. P3 order. The relevant portion of the order reads as follows :
“The reliance placed by the assessee’s representative on s. 10 of the General Clauses Act to argue that the tax paid on 1st Dec., 1997 should be treated as having been paid on 30th Nov., 1997 is misplaced. The object of s. 10 of the General Clauses Act is to enable a person to do what he could have done on a holiday, on the next working day. Where a period is prescribed for the performance of an act in a Court or office and that period expires on a holiday, then s. 10 of the General Clauses Act provides that it should be considered to have been done within that period, if it is done on the next day on which the Court or office is open. For s. 10 to apply, all that is required is that there should be a period prescribed and that period should expire on a holiday (H.H. Raja Harinder Singh vs. S. Karnail Singh AIR 1957 SC 271). Sec. 140A does not provide for a period for payment of true (sic-tax) and interest under that section. All it says is that the tax or interest payable if any shall be paid before filing of the return and proof thereof attached along with the return. That being so, tax paid on 1st Dec., 1997 cannot be treated as having been paid on 30th Nov., 1997, since the provisions of s. 10 of the General Clauses Act do not apply to such a payment. Therefore, since the tax was paid only 1st Dec., 1997, the AO was justified in levying interest for the month of December, 1997 also in view of the specific provision contained in s. 234B.”
Based on the above finding, the revision petition was dismissed. This writ petition is filed, challenging Ext. P1 to the extent it levies interest for the month of December, 1997 and also Ext. P3. According to him, the revisional authority fell in error in rejecting the contentions of the petitioner that the provisions of the General Clauses Act will apply to the facts of the case. He submits that, there was a time-limit for filing returns under s. 139 of the IT Act. The said time-limit was to expire on 30th Nov., 1997. Before filing the return the balance tax has to be paid and proof of the same has to be filed along with the return. Since 30th Nov., 1997 was a holiday, he paid the balance tax and filed return on 1st Dec., 1997. When s. 140A of the IT Act is r/w 139, there is a time-limit fixed under the statute for payment of balance tax and for filing return. But, the revisional authority only adverted to s. 140A and thus misdirected itself in law. So, the petitioner seeks to quash Ext. P1 to the extent it is impugned and also Ext. P3.
The respondents have filed a statement supporting the impugned order. I heard the learned standing counsel for the respondents also. Going by the facts of this case, I feel that the contention of the petitioner has to be accepted. Though there is no prescription of time-limit under s. 140A of the IT Act when it is r/w s. 139, it has to be held that for payment of tax there was a time-limit which expired only on 30th Nov., 1997. The petitioner paid it on the next working day i.e. on 1st Dec., 1997. Therefore, I feel that the levy of interest for one month is unsustainable.
In the result, Ext. P3 is quashed and Ext. P1 to the extent it is impugned is also set aside. The original petition is allowed as above.
[Citation : 298 ITR 367]