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2021 (12) TMI 882 - HC - Income TaxRegular assessment or not - Waiver of levy of interest u/s 215 - delay in finalisation of the assessment was not attributable to the Appellant - whether tribunal was right in holding that a fresh assessment which has been made by the Assessing Officer to give effect to the directions of the Commissioner of Income Tax under Section 263 of the Act setting aside the original assessment, would constitute a ‘regular assessment’ for purposes of section 215 of the Act ? - HELD THAT:- For assessment year 1985-86, returned total income of Appellant was ₹ 1,63,41,650/-. In the regular assessment proceeding completed on 28/03/1988, the total income was determined at ₹ 2,74,47,780/- and interest under Section 215 of the said Act amounting to ₹ 13,67,999/- was charged. In the Appeal filed by the Assessee, the amount of interest was reduced to ₹ 8,53,650/-. In the facts of the case, since the interest under Section 215 was charged in the regular assessment order, the Assessing Officer had the power to charge interest under Section 215 of the Act, while carrying out reassessment. Section 215(4) empowers the Assessing Officer to waive or reduce the amount of interest chargeable under section 215 under circumstances prescribed in rule 40 of the Income Tax Rules, 1962. Deputy Commissioner of Income Tax, Bombay, by order dated 20/03/1989 in the exercise of power under Rule 40 of Income Tax Rules, held that delay in finalization of assessment is not attributable to Assessee and therefore the Assessee is not liable to pay interest under Section 215 of the Act beyond the period of one year from the date of filing of return. Accordingly, the Appellant was held to be liable to pay an amount of ₹ 4,40,020/-. The order of Dy.CIT, Bombay, dated 20/03/1989, has not been challenged by Revenue or Appellant, with the result said order attained finality. In the absence of challenge to the order under Rule 40(1) of IT Rules, the Appellant is not entitled to the benefit of Judgment of Division Bench of this Court in the case of CIT Vs. Bennett Coleman & Co. Ltd. [1993 (6) TMI 3 - BOMBAY HIGH COURT] Therefore Appellant is not entitled to waiver of interest for a period of one year. Appellant is entitled to the benefit of order dated 20/03/1989 passed under Rule 40(1) only to the extent stated therein. Appellant was liable to pay an amount of ₹ 4,13,630/-as per order dated 20/03/1989 annexed to this Appeal at Exh.C. The questions are answered accordingly.
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