1. M/s. B. V. Aswathaiah and Brothers of Bangalore, a registered partnership firm of partners, which is the petitioner before me, is an assessee on the file of the ITO, Assessment-4, circle-II, Bangalore. For the assessment year 1976-77 relevant to the accounting year ending on March 31, 1976, the petitioner filed its return under the I.T. Act, 1961 ('the Act'), on August 31, 1976, instead of filing the same on July 31, 1976, which was the last day for filing that return under s. 139(1) of the Act. On April 29, 1977, the ITO has made an order against the petitioner under s. 139(8) of the Act levying a sum of Rs. 4,448 as interest for the delay in filing its return (exhibit-A), the validity of which is challenged by it in this petition under article 226 of the Constitution.
2. Sri G. Sarangan, learned counsel for the petitioner, contends that the delay in filing the return being for a period of 'less than a month', it was not open to the ITO to levy interest under s. 139(8) read with rule 119A of the I.T. Rules framed under the Act. In support of his contention, Sri Sarangan strongly relies on the two Division Bench rulings of the Madras and Calcutta High Courts in CIT v. Kadri Mills (Coimbatore) Limited : 106ITR846(Mad) and CIT v. Brijlal Lohia and Mahabir Prosad Khemka : 124ITR485(Cal) .
3. Sri K. Srinivasan, learned senior standing counsel of the Income-tax Department, appearing for the respondent in justifying the impugned order contends that the month referred to in rule 119A of the Rules should be reckoned as a period of 30 days and so reckoned, the levy of interest was legal and valid. In support of his contention. Sri Srinivasan strongly relies on a Division Bench ruling of the High Court of Allahabad in CIT v. Laxmi Rattan Cotton Mills Co. Ltd. : 97ITR285(All) .
4. The term 'month' occurring in the Act and the Rules has not been defined and, therefore, the definition of that term, if any, found in the General Clauses Act of 1897 (Central Act No. X of 1897) (GC Act), had necessarily to be applied in ascertaining the meaning of that term occurring in the Act and the Rules.
5. Section 3(35) of the GC Act defines the term 'month' as a month reckoned according to the British calendar. The context of the Act and the Rules do not provide for not applying the term 'month' occurring in the GC Act. On this very definition of the term 'month' occurring in s. 3(35) of the GC Act, the British calendar for the month of August, 1976, would also include August 31, 1976, which would be 'for less than a month' of that month.
6. In Kadri Mills' case : 106ITR846(Mad) and Brijlal Lohia and Mahabir Prosad Khemka's case : 124ITR485(Cal) , the High Courts of Madras and Calcutta construing the term 'month' in the context of imposing penalty under the Act had taken the view that the month occurring in the Act and the Rules should be treated as the British calendar month and not a period of 30 days as construed by the High Court of Allahabad in Laxmi Rattan Cotton Mills' case : 97ITR285(All) . In both the cases, the High Courts of Madras and Calcutta have also dissented from the contrary view expressed by the High Court of Allahabad in Laxmi Rattan Cotton Mills' case : 97ITR285(All) . With respect, the construction placed by the High Courts of Madras and Calcutta on the term 'month' which is in accord with that term occurring in the GC Act is correct and I am in respectful agreement with the views expressed in these cases. For these reasons and for the very reasons stated by the High Courts of Madras and Calcutta, with respect, I regret my inability to subscribe to the views expressed by the High Court of Allahabad in Laxmi Rattan Cotton Mills' case : 97ITR285(All) .
7. Section 139(8) of the Act read with rule 119A of the Rules empowers the ITO to levy interest for not 'less than a month' only and not for a period of 30 days as in the present case. In this view, the levy of interest by the ITO was unauthorised and illegal. On this short ground, the order made by the ITO is liable to be quashed without examining all other contentions urged by both sides in support of their respective cases.
8. In the light of my above discussion, I hold that the impugned order is liable to be quashed. I, therefore, quash the impugned order. Rule issued is made absolute. But, in the circumstances of the case, I direct the parties to bear their own costs.