TMI Blog1992 (10) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... sment and omitted to charge the interest tie discovered the mistake later when he purported to rectify the assessment under section 154 by charging interest under section 215. But the assessee successfully challenged it in appeal before the Appellate Assistant Commissioner who set aside the order as one not falling within the purview of section 154. The Income-tax Officer 'thereafter passed an order' on October 7, 1978, levying interest under section 215.The amount of interest thus demanded was Rs. 3,874. A copy of this order is annexure A. The assessee challenged it in appeal with the contention that the Income-tax Officer had no jurisdiction to pass a separate order charging interest. This did not find favour with the Appellate Assistant Commissioner who dismissed the appeal by his order annexure B, in the view that the Income-tax Officer was perfectly competent to pass a separate order charging interest under section 215. He also held that an appeal was not maintainable against the order annexure A, but we need not dwell on the reasons for this view as this point is not in issue before us. The orders, annexures A and B, were set aside in appeal by the Appellate Tribunal (annexur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levy of interest by separate order will also be subject to the same right of appeal, as if it had formed part of the order of assessment itself. He maintains, however, that the period prescribed by section 153 which applies only to assessments cannot be attracted to an order levying interest. Both sides placed considerable reliance on a number of decisions. Emphasis was particularly laid on certain passages and expressions in the decision of the Supreme Court in Central Provinces Manganese Ore Co. Ltd. v. CIT [1986] 160 ITR 961. So far as the Revenue is concerned, they placed reliance on the expression "orders" in the following passage at page 966 : " Now, the question is whether orders levying interest under sub- section (8) of section 139 and under section 215 are appealable under section 246 of the Income-tax Act. " Counsel for the Revenue stresses on the use of the plural " orders to imply a decision therefrom by the Supreme Court that separate orders levying interest are contemplated or at least justified. When the Supreme Court spoke of orders levying interest, they postulated separate orders levying interest, so went the argument. Counsel for the respondent in his turn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner to invoke his powers of revision as the Revenue stood prejudiced by the non-levy of interest. What counsel for the assessee wanted to suggest before us was that the decision would have been otherwise if the Income-tax Officer had the power to pass separate order charging interest in which case that power could be exercised later and the mere non-levy of interest in the, order of assessment itself did not prejudice the Revenue. Counsel, therefore, submitted that the decision implicit in the above case, was that a separate order levying interest could not be passed. It is uncontrovertible that neither of these decisions directly covers the point in question before us, nor do they touch the matter even incidentally. In making their submissions as they have done, we are afraid, counsel are attempting to do what Lord Denning L.J. Of the Court of Appeal in England cautioned against in his judgment in Paisner v. Goodrich [1955] 2 QB 353, 358 ; [1955] 2 All ER 330, 332 (CA): "When the judges of this court give a decision on the interpretation of an Act of Parliament, the decision itself is binding on them and their successors (see Cull v. Inland Revenue Commissioners [1940 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... point which was not before them and which they never intended to deal with, even though such an inference may seem to flow logically from the ratio decidendi of the case. That was why it was stated by Lord Halsbury LC in Quinn v. Leathem [1901] AC 495 (HL), at page 506: "...there are two observations of a general character which wish to make, and one is to repeat what I have very often said before, that every judgment must be read as applicable to the particular facts proved, or assumed to be proved, since the generality of the expressions which may be found there are not intended to be expositions of the whole law, but governed and qualified by the particular facts of the case in which such expressions are to be found. The other is that a case is only an authority for what it actually decides.I entirely deny that it can be quoted for proposition that may seem to follow logically from it. Such a mode of reasoning assumes that the law is necessarily a logical code, whereas every lawyer must acknowledge that the law is not always logical at all. " A case is thus a precedent, and binding for what it explicitly decides and no more. It would be too much to imply and read into its pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasoned order being passed thereon either exercising or refusing to exercise the discretion. The question that arose in CIT v. Cochin-Malabar Estates Ltd. [1974] 97 ITR 466 (Ker), on which the assessee placed considerable reliance, was as to whether the omission to levy interest under section 215 in the order of assessment could be presumed to be waiver of the interest by virtue of the powers vested in the Income-tax Officer under rule 40. This court held that such an order was prejudicial to the Revenue inasmuch as there was a failure to levy interest which was chargeable under the Act. The question whether a separate order could be passed levying interest under section 215 was neither raised nor considered in that case. This decision was not accepted by a Division Bench of the Karnataka High Court in CIT v. H. H. Rajkuverba Dowager Maharani Saheb of Gondal (Executors of the Estate of late) [1978] 115 ITR 301 on the ground that an order levying interest did not form part of the order of assessment and that an order could be passed separately levying the interest even after the order of assessment was passed. Therefore, it was held that the mere omission to levy interest in the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , i.e., part of the process of assessing the tax liability of the assessee. But does this mean that the order charging interest should also be inscribed in the same piece of paper, namely, the order of assessment ? In the absence of anything in the Act requiring the charge of interest to be in the order of assessment itself, we are not inclined to accept the contention of the respondent that the charge of interest should be made along with the assessment and as part of it in the same order. This is a matter of procedure and no prejudice is caused to the assessee by the charge of interest being made in a separate order. The levy of interest is no doubt part of the process of assessment, but that does not mean that it should be in the same piece of paper or even simultaneous. In fact, section 156 of the Income-tax Act, 1961, contemplates a notice of demand for the amount of the interest also, apart from tax and penalty. When the process of assessment obliges the Income-tax Officer to levy interest ( subject, no doubt, to the discretion vested in him to waive or reduce it), his omission to do so in the order of assessment will not preclude him from passing a fresh order charging inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oned in the preceding paragraph. This question did not arise for consideration before the Tribunal because they struck down annexure A even at the threshold itself as incompetent. The question of considering what would have been the consequence if it was a competent order did not, therefore, arise for consideration before the Tribunal. The respondent is, therefore, entitled to raise the point as it is comprehended within the question referred. Therefore, even though the Department succeeds on the question of law, it has to fail on the question of limitation. We, therefore, hold that an order charging interest under section 215 can be passed separately, apart from the assessment, but within the period prescribed for the assessment under section 153. But the order, annexure A, in this case is invalid as one passed beyond that period. The Revenue wins on the question of law ; but the assessee wins the case. We, therefore, answer the question referred in the affirmative, that is, in favour of the assessee and against the Revenue. There will be no order as to costs. A copy of this judgment, under the seal of this court and the signature of the Registrar, will be sent to the Income ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
