TMI Blog2012 (10) TMI 883X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the assessee filed under Section 264 of the Act - petition dismissed - CWP No. 4111 of 1992 - - - Dated:- 4-4-2012 - M.M. Kumar and Ajay Kumar Mittal, JJ. Rohit Sud for the Petitioner. Vivek Sethi for the Respondent. JUDGMENT Ajay Kumar Mittal, J - The assessee-petitioner has approached this Court by way of instant petition under Articles 226/227 of the Constitution of India for setting aside the order dated 16.3.1990 (Annexure P-5) under Section 264 of the Income Tax Act, 1961 (in short "the Act") read with order dated 6.5.1991 (Annexure P-12) under Section 154 of the Act passed by respondent No.1 and to cancel the levy of penal interest under Sections 215 and 139(8) of the Act by respondent No.2 vide order under Sections 154/155 of the Act dated 29.9.1988/3.10.1988 (Annexure P-3). 2. The facts relevant for the disposal of the present petition as narrated in the petition are that the assessee-petitioner filed his return on 29.7.1985 for the assessment year 1985-86 declaring an income of Rs. 8,80,175/-. The said return was revised on 13.8.1986 declaring an income of Rs. 7,49,547/- which included share from a registered firm M/s K. and Company, New D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hence, the present writ petition. 3. We have heard learned counsel for the parties. 4. Learned counsel for the petitioner submitted that the revenue was in error in levying interest under Sections 215 and 139(8) of the Act and the rejection of the petition which was filed under Section 264 of the Act was also unjustified. Even the application filed under Section 154 of the Act for rectification of order dated 16.3.1990 passed by the Commissioner has been declined ignoring well settled principles of law. According to the learned counsel, the return declaring income for the assessment year 1985-86 was filed on 29.7.1985 wherein the income was declared at Rs.8,80,175/-. The regular assessment under Section 143(3) of the Act was framed on 29.1.1988 wherein no interest was sought to be levied under Sections 215 and 139(8) of the Act. The revenue invoked the provisions of Sections 154/155 of the Act for levying interest under Sections 215 and 139(8) of the Act which was not permissible. Learned counsel further submitted that if the Assessing Officer had failed to levy interest under Sections 215 and 139(8) of the Act at the time of regular assessment, it was not open to the revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when the same had not been levied at the time of passing of regular assessment on 29.1.1988? (b) Whether the order levying interest under Sections 215 and 139(8) of the Act while passing order under Section 154 of the Act could be validly passed without adhering to the requirement of notice under sub-section (3) of Section 154 of the Act? 8. Taking up the first issue, the provisions of Section 215 of the Act to the extent it is relevant for resolving the present controversy at the material time, reads thus:- "215 (1) Where, in any financial year, an assessee has paid advance tax under section 209A or section 212 on the basis of his own estimate (including revised estimate), and the advance tax so paid is less then seventy five per cent of the assessed tax, simple interest at the rate of fifteen per cent per annum from the Ist day of April next following the said financial year up to the date of the regular assessment shall be payable by the assessee upon the amount by which the advance tax so paid falls short of the assessed tax. Provided that in the case of an assessee, being a company, the provisions of this sub-section shall have effect as if for the words "seventy-five ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reased, the Assessing Officer shall serve on the assessee a notice of demand in the prescribed form specifying the sum payable by the assessee. Such notice of demand shall be deemed to be issued under Section 156 of the Act and the provisions of the Act shall apply, accordingly. In a case, where interest is reduced, the excess interest paid, if any, shall be refunded to the assessee. 11. Adverting to the facts of the present case, the regular assessment order under Section 143(3) of the Act was passed on 29.1.1988 which was subject to rectification under Sections 154/155 of the Act. The income of the assessee was assessed at Rs.7,67,860/- on which there was no liability on account of interest under Sections 215 and 139(8) of the Act as the advance tax paid was in excess of the tax liability. The assessee was held entitled to refund which was allowed along with interest under Section 214 of the Act. The Assessing Officer while finalizing regular assessment on 29.1.1988 had adopted the share of the assessee from the firm M/s K Co. at the declared figure. This was subject to rectification under Sections 154/155 which could be less or more from the assessed figure. Later on, on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eficiency in payment of advance tax. Interest for default in paying advance tax is mandatory and is imposable where assessee was liable to pay advance tax. 14. Adverting to the second issue, sub-section (3) of Section 154 of the Act envisages issuance of notice before any liability can be created or enhanced on the basis of an order of rectification. However, the position would be different where, the rectification order has been passed on an application of the assessee. He cannot complain against the order by reason only of the fact that there was no notice to him for levying the interest. In the present circumstances, the assessee had himself filed the application (Annexure P-2) and interest under Sections 215 and 139(8) of the Act for default in paying advance tax is mandatory and is imposable where the assessee is liable to pay advance tax. Therefore, no separate notice under sub-section (3) of Section 154 of the Act was, thus, required to be issued and no benefit can be derived by him on that count. To conclude, the assessee could not escape from the liability to pay interest and no fault could be noticed in the order of the Commissioner rejecting the petition of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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