TMI Blog1994 (10) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... sed on 15th Feb., 1990 under s. 143(3) r/w s. 147 determining the total income of the assessee at Rs. 84,420. In the said assessment order interest under ss. 139(8) and 217 was charged at Rs. 34,969 and 52,627 respectively. 3. According to the ITO, for the asst. yr. 1980-81, the assessee had filed a return of income declaring an income of Rs. 16,932 on 4th Nov., 1986. Notice under s. 148 was issued on 8th March, 1988 overruling the belated return filed. During the course of the investigation, the assessee had voluntarily offered for assessment a sum of Rs. 62,500 and filed a revised return on 29th Aug., 1989 declaring a total income of Rs. 74,430 vide letter dt. 7th Feb., 1990, the assessee offered for assessment an additional amount of Rs. 8,340. The assessment order was passed on 15th Feb., 1990 under s. 143(3) r/w s. 147 determining the total income of the assessee at Rs. 82,772. In the said assessment order interest under ss. 139(8) and 217 was charged at Rs. 30,875 and Rs. 48,699 respectively. 4. For the asst. yr. 1981-82, the assessee filed a return of income on 4th Nov., 1986 declaring an income of Rs. 18,207. Notice under s. 148 was issued on 8th March, 1988. During t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harged and reliance was placed on the judgments in the cases of Charles D'Souza vs. CIT (1984) 40 CTR (Kar) 353 : (1984) 147 ITR 694 (Kar) and CIT vs. Padma Timber Depot (1987) 67 CTR (AP) 189 : (1987) 169 ITR 646 (AP). Agreeing with the said submissions, the Dy. CIT(A) held that the charging of interest under ss. 139(8) and 217 in the assessment orders under consideration was not valid. In that view, he cancelled the said levies. The Revenue is aggrieved over this. 8. The Departmental Representative contended that the Dy. CIT(A) erred in deleting the interest charged under ss. 139(8) and 217 holding that the assessments completed under s. 147 were not regular assessments and that he failed to appreciate the clear provisions of Expln. 2 of s. 139(8) whereby, an assessment made for the first time under s. 147 shall be regarded as regular assessment and that in these circumstances he ought to have upheld the decision of the Assessing Officer. 9. The assessee's counsel filed a paper book of 135 pages copy of the assessment order dt. 15th Feb., 1990 for the asst. yr. 1984- 85 in the assessee's own case, copy of the letter dt. 7th Feb., 1990 and written submissions. The arguments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitions. The records of the Department may be looked into as to the nature of recommendation from the ITO and the decision taken by the Dy. CIT (Trivandrum). So far the Dy. CIT (Trivandrum) has not served any order in respect of the assessee's waiver petitions. On the question of regularisation of returns under the Amnesty Scheme, reference may be made to Circular No. 451, dt. 17th Feb., 1986, which is given at pages 129 to 135 of the paper book and reproduced in (1986) 158 ITR (St) 135. Particular reference may be made to question Nos. 1, 5, 6, 19 and 30 in the said circular. On the question of immunities under the Amnesty Scheme, reference may be made to the Circular No. 441, dt. 15th Nov., 1985. The applicability of the Amnesty Scheme has been considered by the Tribunal in its earlier order dt. 28th Feb., 1991 in ITA Nos. 669 670/Coch/1990 in the case of Hotel Ambessador, Kottayam, a copy of which can be seen at pages 103 to 128 of the paper book. The relevant findings can be seen at paragraphs 5, 9 and 10 of the said order. The benefit under the Amnesty Scheme was available upto 31st March, 1987 as per Circular No. 472, dt. 15th Oct., 1986. Even though there is difference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Department's Special Leave Petition is reported in (1990) 186 ITR (St) 28. The High Court of Kerala in the case of Lally Jacob vs. ITO dissented from the judgment of the Karnataka High Court in the case of Charles D'Souza vs. CIT. But, as the said judgment of the Karnataka High Court in the case of Charles D'Souza stands confirmed by the Supreme Court by its dismissal of the Department's Special Leave Petition, it is respectfully submitted that the assessee's case stands on a different footing. The assessments under reference are not regular assessments. It is also submitted that no notices were issued before the levy of interest under ss. 139(8) and 217 thereby denying the benefit of natural justice. Reliance is placed on the decisions in the cases of CIT vs. Executors of the Estate of Late H.H. Rajkuverba Dowager Maharani Saheb of Gondal 1978 CTR (Kar) 347 : (1978) 115 ITR 301 (Kar) and S. Govindaraju vs. CIT (1981) 25 CTR (Kar) 340 : (1982) 138 ITR 495 (Kar). The judgment of the Supreme Court in the case of Central Provinces Manganese Ore Co. Ltd. vs. CIT (1986) 58 CTR (SC) 112 : (1986) 160 ITR 961 (SC) is also to the effect that an opportunity should be given to the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a), and 273 does not mean that interest under ss. 139(8) and 217 should also be waived. Interest is compensatory in nature. As stated in the note, dt. 8th Sept., 1994, the Dy. CIT called for the report of the ITO in the matter of assessee's petitions for waiver of interest and the ITO had submitted report on 8th Oct., 1990 for the asst. yrs. 1979-80 to 1984-85 suggesting the Dy. CIT to consider the assessee's request favourably. 11. I have considered the rival submissions, case law cited and the papers filed before me. The assessments were completed on 15th Feb., 1990 for the assessment years under consideration. The ITO has initiated penalty proceedings under ss. 271(1)(a), 271(1)(c) and 273. The assessee filed explanations dt. 12th March, 1990 in respect of the said penalty proceedings. The ITO vide his order sheet entries dt. 28th March, 1990 dropped the said penalty proceedings "for the reasons stated in the explanations filed by the assessee". Penalty under s. 271(1)(a) is for the delayed filing of the return of income. Interest under s. 139(8) is for the belated filing of the return of income. Penalty under s. 273 is for the failure to file an estimate of advance tax. Inte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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