TMI Blog1992 (2) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee stated that the order of the ITO charging interest under s. 139(8) was bad in law, since it had been passed after the expiry of the time-limit laid down under s. 153(2A) for the passing of such an order. It was stated that the order was required to be passed by 31st March, 1988, whereas it had been passed only on 21st Sept., 1988. It was contended that the order thus being an illegal order was required to be struck down. The Dy. Commissioner(A) dismissed the appeal of the assessee in limine on the ground that the appeal filed by the assessee was not competent. According to the Dy. Commissioner(A), the assessee could come up in appeal against the levy of interest under s. 139(8) if the contention of the assessee were that he wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer had charged interest under s. 139(8) while completing the assessment of the assessee for the asst. yr. 1982-83. The assessee went up in appeal before the Dy. Commissioner(A), contending that levy of interest under s. 139(8) was not justified, since the assessee had not been provided with an opportunity of being heard before interest came to be levied. The Dy. Commissioner(A) disposed of the appeal on 28th Oct., 1985 and set aside the order levying interest under s. 139(8). He directed the ITO to levy interest under s. 139(8), if called for, by passing a fresh order, after providing the assessee with an opportunity of being heard. Thereupon, the Assessing Officer passed a fresh order under s. 139(8), on 21st Sept., 1988. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed in pursuance of an appellate order. The Supreme Court observed as under in the case of Central Provinces Manganese Ore Co. Ltd.: "........if that is borne in mind, it will be apparent that the levy of interest is part of the process of assessment". 5. The Karnataka High Court, in its judgment in the case of National Products vs. CIT 1976 CTR (Kar) 179 : (1977) 108 ITR 935 (Kar) had explained the position in regard to the levy of interest under s. 139 as under: "The levy of penal interest under s. 139 or s. 215 is made in the regular assessment order; the demand issued pursuant to the assessment order is for the total amount of liability imposed inclusive of tax and interest. While levy of penal interest under s. 18A of the 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd to asst. yr. 1982-83 was that the Assessing Officer was not justified in not following the direction of the Dy. Commissioner(A) given in his order dt. 28th Nov., 1985 that interest under s. 139(8) was to be calculated on the basis that the assessee was a registered firm. We are aware of the fact that the decision of the Karnataka High Court in the case of CIT vs. Mahadeswara Lorry Service (1980) 18 CTR (Kar) 147 : (1981) 129 ITR 516 (Kar) on the basis of which the Dy. Commissioner(A) had given the direction to the Assessing Officer to calculate interest on the basis that the assessee was a registered firm has since been overruled by the Supreme Court in Ganesh Dass Sriram vs. ITO (1987) 66 CTR (SC) 35 : (1988) 169 ITR 221 (SC). But, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is, thus, put forth that these orders being illegal orders should be struck down. The Dy. Commissioner(A) had dismissed the appeals on the ground that the appeals were not competent. According to the Dy. Commissioner(A), only if the assessee contended that he was not at all liable to interest, could he come up in appeal on the matter of levy of interest; and since that was not the case, the appeals filed by the assessee could not be entertained. We are of the view that the Dy. Commissioner(A) was not justified to dismiss the appeals as not being competent. After all, the assessee had challenged the very legality of the orders levying interest. The question of the legality or otherwise of an order is the basic thing and it has got to be look ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
