OM PRAKASH, C. J. At the instance of the Revenue, the Tribunal drew up a statement of the case and referred the following question relating to the asst. yr. 1984-85 for the opinion of this Court under s. 256(2) of the IT Act, 1961 (briefly, the Act) :
'Whether, on the facts and in the circumstances of the case, levy of interest under s. 139(8) in an assessment under s. 143(3) r/w s. 147(a) is valid in law?"
2. Sec. 139(8)(a) of the IT Act, 1961, provides that where the return under subs. (1) or sub~s. (2) or sub-s. (4) for an assessment year is furnished after the specified date or is not furnished, then the assessee shall be liable to pay simple interest 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 s. 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.
3. In the case at hand, in response to a notice under s. 148 issued on 12th Feb., 1987, the assessee filed return of income for the asst. yr. 1984-85 on 31st March, 1987. The AO then completed the assessment and charged interest under s. 139(8). The contention of the assessee is that the assessment made in response to the notice under s. 143 r/w s. 147(a) is not a regular assessment and, therefore, no interest under s. 139(8) could be charged. It is not disputed by the parties that no assessment under ss. 143 and 144 was made in this case and the assessment made under s. 147(a) r/w s. 148 is the only assessment. The question for consideration, therefore, is whether the assessment made for the first time under s. 147(a) r/w s. 148, is a regular assessment. This question is not res integra so far as this Court is concerned. In Lally Jacob vs. ITO & Ors. (1992) 105 CTR (Ker)(FB) 425: (1992) 197 ITR 439 (Ker) (FB) , a Full Bench of this Court ruled down that an assessment for the first time made under s. 147 is a regular assessment. ExpIn. 2 to s. 139(8) read as under:
"Where, in relation to an assessment year, an assessment is made for the first time under s. 147, the assessment so made shall be regarded as a regular assessment for the purposes of this sub-section".
The Full Bench in Lally Jacob (supra) held the same way what has been stated under ExpIn. 2 to s. 139(8). ExpIn. 2 was inserted by the Taxation Laws (Amendment) Act, 1984 w.e.f. Ist April, 1985. The submission of learned counsel for the assessee, therefore, is that Expln. 2 will operate prospectively and, therefore, the same will not apply for the asst. yr. 1984-85. In Lafly Jacob (supra), the Full Bench considered the question whether sub-s. (6) added to s. 215 by the Taxation Laws (Amendment) Act, 1984 w.e.f. lst April, 1985, which was couched almost in the same words in which s. 139(8) is couched, is clarificatory in nature. Similar contention was raised before the Full Bench that sub-s. (6) to s. 215 inserted w.e.f. 1st April, 1985, was operative prospectively. Rejecting such contention, the Full Bench held that sub-s. (6) of s. 215 is only a clarification of the earlier law as different High Courts have expressed different opinions on the question and by the inclusion of that sub-section alone, it may not be stated that for the assessment year in question such assessments cannot be treated as regular assessment.
4. Following the decision in the case of Lally Jacob (supra), we hold that ExpIn. 2 to s. 139(8) inserted w.e.f. 1st April, 1985, was only clarificatory in nature. This being so, the assessment made under s. 147(a), r/w s. 148 for the first time is nothing but a regular assessment within the meaning of s. 139(8) and, therefore, the AO rightly charged interest for delay in filing return.
5. In support of his contention that assessment made under s. 147(a) r/w s. 148 is not a regular assessment, learned counsel for the assessee relied on another Full Bench decision of this Court in CIT vs. G.B. Transports (1986) 50 CTR (Ker)(FB) 9 : (1985) 155 ITR 548 (Ker) (FB) and a Supreme Court decision in Modi Industries Ltd. & Ors. vs. CIT & Anr. (1995) 128 CTR (SC) 361 : (1995) 216 1TR 759 (S0. In G.B. Transports (supra), the Full Bench of this Court held as follows:
"The term "regular assessment" is used in the statute in contradistinction to a self-assessment under s. 140A, a provisional assessment under s. 141 before its deletion and an assessment or reassessment under s. 147".
In G.B. Transports (supra) the Full Bench decision referred to the fact situation where more than one assessment existed at a stage and, therefore, the Full Bench held that regular assessment is used in contradistinction to another assessment either that is in the nature of self assessment or a provisional assessment or a full-fledged assessment made under ss. 143 and 144 of the Act. In Modi Industries (supra), the Supreme Court considered the question whether an order passed giving effect to orders of higher authorities either in appeal or otherwise will amount to regular assessment and in that context the Supreme Court stated that the assessment made under s. 143 or 144 alone was a regular assessment. The Supreme Court did not consider the question whether an assessment made under s. 147(a), r/w s. 148 for the first time could be called a regular assessment.
6. Considering Expin. 2 to s. 139(8) which is clarificatory in nature and the other case law, we are of the considered view that the assessment made for the first time under s. 147(a), r/w s. 148 is a regular assessment and that being so, AO could legally charge interest under s. 139(8).
In the result, we answer the above mentioned question in the affirmative, that is, in favour of the Revenue and against the assessee.
OPEN