TMI Blog2012 (2) TMI 448X X X X Extracts X X X X X X X X Extracts X X X X ..... compounding application and paid tax every month based on the turnover declared. However, the assessee has been paying tax only at compounded rate which cannot be anything other than the tax payable under section 8(f) of the Act. We do not think the assessee can now revert back for turnover based assessment because returns filed every month were not accompanied by payment of tax on the taxable turnover but tax payment was under the compounding scheme, though by mistake at 150 per cent of previous years’ tax as against correct rate of 200 per cent. We do not find any justification for the Tribunal or the first appellate authority to interfere with the assessment which is made based on application filed by the assessee but by adopting the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cent of the highest tax paid for the three preceding years. This is because the respondent made application without taking into account the amendment made to section 8(f). When the assessment was made on January 4, 2008, the assessing officer accepted the compounding application, but applied rate of tax in terms of the statute. It is seen from the assessment order that the assessing officer considered tax payment for the immediate three preceding years in terms of section 8(f) of the Act and it was noticed that among the three assessment years 2004-05, 2005-06 and 2006-07, the highest tax paid by the assessee was for the year 2006-07 which is ₹ 2,36,797. The amount of tax found due as payable under the compounding scheme was, therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year s tax and not at 200 per cent as assessed by the officer. So much so, according to the assessee, the application should have been rejected. However, the Government Pleader submitted that a compounding application is only an application filed for payment of tax at compounded rate in accordance with the statute and not at rate prescribed by the party because the Act does not visualise any such compounding on party s own terms. We are in complete agreement with this argument because compounding is possible only in accordance with the statute which provides for payment of increased tax at the rate provided in the section. It is seen from the assessment order that the assessee has also achieved turnover progressively from 2004-05 to 2006-07 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed provisions of section 8(f) applicable for the year 2007-2008. We, therefore, allow the revision case by setting aside the orders of the Tribunal and that of the first appellate authority and restore the assessment. However, we feel the officer will not be justified in demanding interest because no orders were passed on compounding application within a reasonable period and monthly returns filed were accepted without verifying the correctness of it. Further, the assessments stood cancelled by virtue of first appellate authority s order. So much so, there will be direction to the assessing officer not to recover any interest from the assessee for any period, if arrears of tax are paid within two weeks from the date of receipt of copy of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
