TMI Blog1986 (8) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... essee on9-12-1982. In the computation given on the fact of this demand notice, it was indicated that interest was being charged from the assessee in terms of section 139 of the Act, amounting to Rs. 32,639 and in terms of section 216 of the Act, amounting to Rs. 36,954. 2. The assessee appealed against the aforesaid order under section 154 to the Commissioner (Appeals) who vide his order dated31-3-1983quashed the demand for interest by observing, inter alia, as follows: "6. Again this action of the assessing officer cannot be upheld by me because, firstly, as is contended by the learned counsel, the assessing officer had not given a show-cause notice to the appellant before taking impugned action in this regard so far as the charge of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our view to entertain the appeal and vacate the charging on interest mentioned in the demand notice. Such mention, in the demand notice, of interest was purely on account of change of opinion as the assessing authorities had an option which was not exercised earlier no doubt the facts were the same. The learned IAC (Assessment)'s action, therefore, was not tenable on account of the change of opinion also." 4. In the meanwhile the assessee had put in an application under section 154. While passing the order under section 154, on the request of the assessee, the IAC (Assessment) again demanded interest under section 216 and under section 139 ignoring the order of the Commissioner (Appeals) for the aforesaid assessment year which had been pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o Rs. 32,639 under section 154 on9-12-1982as the income of the assessee was increased to some extent. In view of this fact, the assessee's application for deleting the interest under sections 139 and 216 is rejected accordingly. A reference is made to Commissioner (Appeals) separately, in this behalf." It is not clear from the facts placed before us as to whether reference was made by the IAC (Assessment) to the Commissioner (Appeals) as indicated in the last line quoted above. But as noted earlier, in the meanwhile, the order of the Commissioner (Appeals) dated31-3-1983came up for consideration before the Tribunal on18-9-1984and they confirmed the same as noted above. 5. The assessee again appealed against the second order under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... howsoever erroneous the finding of his predecessor might be, the Commissioner (Appeals) himself could not correct the said mistake when the order of his predecessor had merged with the order of the Tribunal the IAC (Assessment) and the Commissioner (Appeals) were merely trying to bypass the validly passed orders of the proper appellate authorities and such action was not permissible under the law as held by their Lordships of the Hon'ble Supreme Court in the case of CIT v. Rao Thakur Narayan Singh [1965] 56 ITR 234. He also placed reliance on the observations of their Lordships of the Hon'ble Supreme Court in the case of Bhopal Sugar Industries Ltd. v. ITO [1960] 40 ITR 618 wherein their Lordships of the Hon'ble Supreme Court had stated, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be justified in bypassing the said order and initiating reassessment proceedings in derogation of the findings given by the Tribunal. In the present case, the Tribunal has passed an order which dealt directly with the dispute as to whether the IAC (Assessment) was justified with the demanding interest under sections 139(8) and 216 from the assessee in respect of the assessment year 1979-80 amounting to Rs. 32,613 and Rs. 32,954 respectively. Paragraph 5 of the order of the Commissioner (Appeals) dated31-3-1983which was been confirmed by the Tribunal would make this position apparently clear. It was with regard to the above demands that the Commissioner (Appeals) held, though erroneously, that the demand in question had been created throu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . After scrutinising the facts as brought before us, it appears to us that the facts as stated by the IAC (Assessment) in his order dated27-10-1983are not doubt correct, but the IAC has no locus stand to modify the order of the Tribunal nor does the Commissioner (Appeals) have such locus standi. Whether or not the Tribunal would be able to rectify the mistake in question would have to be considered when an appropriate application is made before it. Presently we will express no opinion on the subject. Suffice it to say that the present order of the Commissioner (Appeals) is entirely erroneous insofar as it disturbs the order of the Tribunal which he cannot. The present appeal of the assessee should, therefore, succeed and we, accordingly, al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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