1973 (5) TMI 27 - HC - Income Tax

Summary

Issues:
- Appeal against levy of interest under section 18A(6)/18A(8)
- Interpretation of jurisdiction of the Appellate Assistant Commissioner of Income-tax
- Consideration of whether penal interest is appealable under section 30
- Analysis of Supreme Court decisions regarding the appealability of penal interest
- Examination of the expression "denying his liability to be assessed under the Act" in section 30

Analysis:
The judgment pertains to a reference under section 66(1) of the Indian Income-tax Act, 1922, involving an appeal against the levy of interest under section 18A(6)/18A(8). The Appellate Assistant Commissioner dismissed the appeal as incompetent, leading to a second appeal before the Income-tax Appellate Tribunal. The central issue revolved around whether an appeal lies against the imposition of penal interest under the Act.

The jurisdiction of the Appellate Assistant Commissioner of Income-tax is delineated in section 30 of the Act, which enumerates the orders appealable. Notably, orders under section 18A(6) or section 18A(8) are not included in the list of appealable orders under section 30. Previous court decisions affirmed this position, emphasizing that no appeal lies against orders related to interest under section 18A(6)/18A(8).

The judgment delves into the distinction between tax, penalty, and interest under the Income-tax Act. While tax and penalty have provisions for appeal, interest, specifically penal interest, lacks a specific appeal provision. The absence of an appeal against interest is attributed to historical developments in the legislation and the lack of subsequent amendments to provide for such appeals.

The analysis further scrutinizes Supreme Court decisions, notably the case of M. Chockalingam and M. Meyyappan v. Commissioner of Income-tax, which discussed the necessity of a notice for the imposition of penal interest. Despite broader interpretations of the term "assessment," the judgment clarifies that section 30 does not provide for an appeal against an assessment order as such, focusing instead on specific aspects like income computation and tax determination.

Moreover, the judgment explores the expression "denying his liability to be assessed under the Act" in section 30, emphasizing that a total denial of liability is required for an appeal. The case law cited illustrates instances where the denial of liability was deemed applicable, contrasting with the present situation where the appeal pertained solely to the imposition of penal interest.

Ultimately, the court upheld the dismissal of the appeal, affirming the non-appealability of orders related to penal interest under section 18A(6)/18A(8). The judgment underscores the legislative intent behind appeal provisions and the limitations on expanding appeal rights beyond statutory frameworks, aligning with previous judicial interpretations on the matter.