Satish Chandra, C.J.
1. This reference relates to the assessment years 1964-65 and 1967-68. The two questions referred for our opinion are in respect of these years. In substance, the question is whether interest is payable for late filing of the return in spite of service of notice under Section 139(2) of the Act and without application for extension of time and without any order by the ITO extending the time for filing the return. For the assessment year 1964-65, the return was to be filed till September 30, 1964. A notice under Section 139(2) of the Act was served on the assessee on June 1, 1964, calling for a return on or before July 1, 1964. The assessee, however, filed the return on May 21, 1965.
2. For the assessment year 1967-68, a notice under Section 139(2) calling for a return to be filed on or before October 3, 1967, was issued on September 4, 1967. The assessee, however, filed the return on February 15, 1969. In both these years, the assessee did not apply to the ITO for extension of time either under Section 139(1) or (2) of the Act.
3. The ITO charged interest for late filing of the return. This view was confirmed on appeal. The assessee took the matter to the Tribunal. The Tribunal accepted the reasoning adopted by the Andhra Pradesh High Court in Kishanlal Haricharan v. ITO : 82ITR660(AP) . It disagreed with the view taken by the Mysore High Court in Indian Telephone Industries Co-operative Society Ltd. v. ITO : 86ITR566(KAR) . It held that, in view of the provisions as they stood in the years in question, interest was not chargeable for late filing of the return because the assessee had not applied for any extension of time. At the instance of the Commissioner, the Tribunal has referred the questions mentioned above for our opinion.
4. The matter has been considered by two Full Benches. The AudhraPradesh High Court in ITO v. Secunderabad Tin Industries : 113ITR1(AP) overruled its earlier decision in Kishanlal Haricharan v. ITO : 82ITR660(AP) and approved its subsequent decision in Progressive Engineering Co. v. ITO : 105ITR226(AP) . The Full Bench held that wherethe return is filed beyond the time prescribed by Section 139(1) or in pursuanceof a notice under Section 139(2), though beyond the time prescribed by it interestis chargeable irrespective of the question whether time for filing thereturn was extended on an application of the assessee. The making of anapplication for extension of time is irrelevant to the liability to pay interest.The Full Bench differed from the decisions of tie Delhi High Court in Garg& Co. v. CIT : 97ITR639(Delhi) as well as the High Court of Patna inCIT v. Bahri Bros. (P.) Ltd. : 102ITR443(Patna) and the Jammu & Kashmir High Court in Mulakh Raj Bimal Kumar v. ITO ,
5. The Gauhati High Court has in Shankarlall Goenka v. ITO (since reported in ) also taken the same view, though by majority.
6. We have heard learned counsel for the parties. We find ourselves in agreement with the Full Bench decision of the Andhra Pradesh High Court and the majority opinion of the Gauhati High Court. Learned counsel for the assessee stressed the various aspects mentioned in the decisions, taking the other view but for the reasons given in these decisions, we are not prepared to accept them. In our opinion, interest is payable under the provisions as they stood prior to their amendment by the Taxation Laws (Amendment) Act, 1970, for late filing of the returns even though the assessee had made no application for extension of time. The principal submission by Mr. Gulati appearing for the assessee was that when Section 139(4)refers to Clause (iii) of the proviso to Sub-section (1), then the clause must apply along with the opening part of the proviso. In that event, Clause (iii) would be applicable only when the ITO has extended the time for furnishing the return on an application made by the assessee. We are, however, unable to accept this submission. Sub-section (4) makes the provisions of Clause (iii) applicable 'in every such case', the case being, one where the return had not been filed within the time prescribed either under Sub-section (1) or (2) but was filed before the assessment is made. If we introduce the opening part of the proviso to Sub-section (1), then it will effect cutting down of the express provisions of Sub-section (4), namely, that Clause (iii) has to apply in every such case. By reading the opening part of the proviso, Clause (iii) would become applicable only to such cases covered by Sub-section (4) in which, on an application, time has been extended. That will be contrary to the express language of the statute which says ' in every such case'.
7. Another reason which impels us not to accept the submission of Mr. Gulati is the proviso to Sub-section (2) as it stood prior to 1970. It stated :
'Provided that on an application made in the prescribed manner, the Income-tax Officer may, in his discretion, extend the date for the furnishing of the return, and when the date for furnishing the return, whether fixed originally or on extension, falls beyond the 30th day of September or, as the case may be, the 31st day of December of the assessment year, the provisions of Sub-clause (iii) of the proviso to Sub-section (1) shall apply.'
8. In this case also the provisions of Clause (iii) were made applicable. If we were to read Clause (iii) read with the opening part of the proviso, it will be duplication and will add confusion because this proviso itself speaks of extension of the date contemplated by Sub-section (2). The proviso to Sub-section (2) clearly indicates that the provision in Clause (iii) regarding chargeability of interest alone was needed to be made applicable because the opening part ofthe proviso to Sub-section (1) was, in substance, already there in the proviso to Sub-section (2). In the case of the proviso to Sub-section (2), it will be illogical to read the opening part of the proviso to Sub-section (1) also before making the provisions of Clause (iii) applicable. The language under which Clause (iii) has been made applicable by the proviso to Sub-section (2) as well as by Sub-section (4) shows that the same interpretation has to be placed. Clause (iii) has to be made applicable to both these provisions in the same manner. For this as well as the other reasons mentioned by the Full Benches of the Andhra Pradesh and Gauhati High Courts, we are of the opinion that interest is chargeable in a case where the assessee does not apply for extension of time but files the return beyond the time fixed by the notice under Section 139(2).
9. In this view, we answer the questions referred to us in the negative, in favour of the department and against the assessee. The Commissioner will be entitled to costs which are assessed at Rs. 200.