TMI Blog2002 (11) TMI 735X X X X Extracts X X X X X X X X Extracts X X X X ..... and in the circumstances of the case, the ld. CIT(A), has erred in holding that interest under sections 215/217 and 139(8) has been correctly levied in the order passed under section 154/155. The CIT(A) ought to have appreciated that there were no directions in the order under section 154/155 to charge interest and the cases relied upon by the CIT(A) are distinguishable." 3. The relevant facts, of the cases, in brief, are that the Assessing Officer framed the assessments under section 143(1) on different dates. While passing the said assessments, no addition had been made by the Assessing Officer in the returned income. No interest under section 139(8) or 215/217 of the Income-tax Act, 1961 had been charged. Subsequently, the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He observed that the assessees had intentionally suppressed the income in the hands of the firm and its partners. 4. The assessees carried the matter to the CIT(A) in the first appeal and contended that the show-cause notice under section 154 was issued by the Assessing Officer only with regard to the rectification of the share of the income and no opportunity was afforded for levy of interest under sections 139(8) and 215 of the Act and hence the levy was bad in law and violated the basic requirement of justice i.e. affording an opportunity of being heard before levying the liability. It was stated that the interest could only be charged at the time of regular assessment and hence the levy of interest for the first time in the recti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of the assessees stated that section 155(1)( c ) of the Act provided that where in respect of any completed assessment of a partner of a firm, it was found on any order passed under sub-section (4) of section 245D of the Act on the application made by the firm that share of the partners in the income of the firm had not been included in the assessment of partners or if included was not correct, the Assessing Officer could amend the order of assessment of the partner. He observed that consequent upon the enhancement of the tax liability, the levy of interest was compensatory and automatic. The learned CIT(A) also relied on the case laws of different Courts, mentioned in the impugned order. 5. As regards to the assessee s contention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In the present cases, it is an admitted position that the Assessing Officer while passing the assessment orders under section 143(1) had not charged any interest under section 139(8) or under section 215/217 of the Act, the interest was charged only in the order under section 154/155(1) of the Act. It is well settled that the interest under sections 139(8) and 215/217 of the Act can be charged only at the time of regular assessment. The regular assessment has been defined in the Income-tax Act, 1961 under sub-section (14) [clause ( 40 )] of section 2, wherein it has been defined that regular assessment means assessment made under section 143 or under section 144. In the present cases, it is undisputed fact that the interest was levied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (6) and Explanation 2 to section 139(8), it is abundantly clear that no interest can be charged for the first time in case of a reassessment made under section 147. What cannot be done directly under the specific provision inserted in section 215(6) and Explanation 2 to section 139(8) providing for levy of interest in case of assessment made for the first time under section 147, it cannot be done under the shelter of section 215(3) or under section 139(8)( b ) providing for increasing or reducing the interest depending on variation in the amount of demand as a result of an order under sections 147, 154, 155, 250, 254, 260, 263 etc. That is a provision which only enables the revenue authorities to appropriately reduce or increase the amo ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
