9911796707
TMI Blog2012 (10) TMI 883X X X X Extracts X X X X X X X X Extracts X X X X ..... aring an income of Rs. 7,49,547/- which included share from a registered firm M/s K. and Company, New Delhi at Rs. 8,28,669/-. The assessment was completed by respondent No.2 on 29.1.1988 at an income of Rs.7,67,880/-. The share from the registered firm was accepted at the returned figure subject to rectification under Sections 154/155 of the Act. The tax on the assessed income worked out to Rs. 4,54,774/-against which the petitioner had deposited the advance tax at Rs.5,90,670/-. Thus, the refund of excess advance tax along with interest under Section 214 of the Act was allowed to the petitioner. No penal interest under Sections 215 and 139(8) of the Act was charged from the petitioner. On completion of the assessment of M/s K. and Company where the petitioner's share was determined at Rs. 20,82,312/-, the assessee moved an application dated 16.7.1988 to respondent No.2 for passing the rectification order under Sections 154/155 of the Act. Respondent No.2 issued a letter dated 23.9.1988 to the petitioner to show cause as to why the interest paid under Section 214 of the Act allowed to him at the time of making the assessment on 29.1.1988 be not withdrawn against which the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sections 215 and 139(8) of the Act at the time of regular assessment, it was not open to the revenue to invoke the provisions of Section 154 of the Act in such a situation. Learned counsel also submitted that no notice under Section 154(3) of the Act was issued to the assessee and, therefore, the order under Section 154 of the Act was bad. Support was sought by the learned counsel for the assessee from the following judgments:- I. CIT v. S.L. Chopra [1989] 179 ITR 65; II. CIT v. Inderjeet Bedi [2002] 257 ITR 671; III. CIT v. G.B. Transports [1985] 155 ITR 548; IV. CIT v. Multimetals Ltd. [1991] 187 ITR 98; V. CIT v. I.O.L. Ltd. [2001] 250 ITR 185; VI. CIT v. Ram Lal Babu Lal [1998] 234 ITR 776; VII. CIT v. Pratap Chand Maheshwari [1980] 124 ITR 653; VIII. CIT v. Smt. Parvati Devi [1983] 141 ITR 738; IX. CIT v. Mahinder Singh [1985] 156 ITR 882; X. CESC Ltd. v. CIT [1998] 233 ITR 50 (SC) 5. Controverting the aforesaid submissions, learned counsel for the revenue submitted that there was a mistake apparent on the face of the record in the assessment order dated 29.1.1988. No interest under Sections 215 and 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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 per cent", the words "eighty-three and one-third per cent" had been substituted. (2)** ** ** (3) Where as a result of an order under section 147 or section 154 or section 155 or section 250 or section 254 or section 260 or section 262 or section 263 or section 264, the amount on which interest was payable under sub-section (1) has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly, and - (i) in a case where the interest is increased, the Income Tax Officer shall serve on the assessee, a notice of demand in the prescribed form specifying the sum payable, and such notice of demand shall be deemed to be a notice under section 156 and the provisions of this Act shall apply accordingly. (ii) in a case where the interest is reduced, the excess interest paid, if any, shall be refunded. (4) to (6)** ** ** 9. It will be noticed from the wordings of Section 215(1) of the Act that a liability is imposed upon the assessee to pay interest where advance ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rectification under Sections 154/155 which could be less or more from the assessed figure. Later on, on the basis of an application filed under Sections 154/155 by the assessee on 16.7.1988 (Annexure P-2), the order dated 29.1.1988 was rectified under Sections 154/155 on 29.9.1988/3.10.1988 (Annexure P-3). When the said order was passed, there was shortfall in payment of advance tax for which the assessee was liable to pay interest under Sections 215 and 139(8) of the Act which was quantified at Rs.2,63,877/- and Rs.8000/-, respectively. However, on an application filed by the assessee under Rule 40 of the 1962 Rules, the interest under Section 215 of the Act was reduced to Rs.1,35,936/-. The assessment order passed on 29.1.1988 itself provided that the order was subject to rectification under Sections 154/155 of the Act which was dependent upon final assessment relating to share of the assessee in the firm M/s K. & Co. The order passed on 29.9.1988/3.10.1988 was, thus, regular assessment order and under the circumstances, it could not be said that it was beyond the scope of the Assessing officer to levy interest under Sections 215 and 139(8) of the Act in the rectificatory order a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est and no fault could be noticed in the order of the Commissioner rejecting the petition of the assessee filed under Section 264 of the Act. 15. Referring to the judgments relied upon by the learned counsel for the petitioner, suffice it to notice that none of these come to his rescue. In those cases, the assessment year involved is prior to assessment year 1985-86 where the amendment to sub-section (3) of Section 215 brought about by Taxation Law (Amendment) Act, 1984 was not in existence. Furthermore, in the present case, there was no liability to pay interest under Sections 215 and 139(8) of the Act while passing assessment order on 29.1.1988 which was subject to rectification under Sections 154/155 of the Act. However, later on an application had been filed by the assessee under Sections 154/155 of the Act for variation in the income of the assessee in view of his share income in the firm M/s K & Co. The liability to pay interest under Sections 215 and 139(8) of the Act arose for the first time thereupon which was not the case in the judgment relied upon by the assessee. However, position could have been debatable where interest under Sections 215 and 139(8) of the Act was im ..... X X X X Extracts X X X X X X X X Extracts X X X X
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