TMI Blog1990 (8) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... 211 of the Act, the advance tax was payable on or before June 15, 1980, September 15, 1980, and December 15, 1980, respectively. The payments of advance tax were made, however, as per details below : Advance tax under Chapter XVII-C of the Act : Rs. Rs. (1) On 13th June, 1980 19,85,024 (2) On 15th September, 1980 23,29,722 (3) On 15th December, 1980 39,12,829 = 82,27,575 (4) On 13th March, 1981 47,46,270 --------------------- 1,29,73,845 --------------------- The assessment was finalised by the Income-tax Officer on September 21, 1984, assessing the taxable income at Rs. 2,66,12,000. On appeal being filed, which was disposed of by the Commissioner of Income-tax (Appeals) by order dated December 29, 1984, the assessed income was reduced to Rs. 2,24,24,732. The order passed by the Commissioner of Income-tax (Appeals) was taken to the Income-tax Appellate Tribunal (for short "the Tribunal") both by the Department as well as by the assessee and, by common order dated April 7, 1988, the Tribunal disposed of the two appeals whereby the findings of the Commissioner of Income-tax (Appeals) were reversed in part. The impugned demand dated July 29, 1988, has been r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are those of the Punjab and Haryana High Court in CIT v. Atlas Cycle Industries [1989] 180 ITR 319 and of the Calcutta High Court in CIT v. Surajbhan Mahawar [1990] 186 ITR 400, where it was held that there was no warrant for the interpretation that any amount paid after the date on which the last instalment of advance tax was payable will not be an amount paid in advance under Chapter XVIIC and that where all payments have been made within the financial year, and well before the filing of the return, all these payments have to be deemed as payment of the advance tax within the meaning of section 215 of the Act. A similar view was taken by the Madhya Pradesh High Court in CIT v. Jagannath Narayan Kutumbik Trust [1983] 144 ITR 526 ; the Madras High Court in CIT v. T. T. Investments and Trades P. Ltd. [1984] 148 ITR 347; the Gujarat High Court in Anup Engineering Ltd. v. ITO [1984] 145 ITR 105 ; the Orissa High Court in Orissa Ceramic Sales v. ITO [1984] 145 ITR 464 ; the Karnataka High Court in CIT v. T. Gopal Bhandary [1986] 159 ITR 828 ; the Bombay High Court in CIT v. Traub (India) P. Ltd. [1979] 118 ITR 525 and Pfizer Ltd. v. K. N. Anantharama Aiyar, CIT [1987] 163 ITR 461 ; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. CIT [1986] 160 ITR 961, and it was held that unless the assessee raises a dispute that he was not liable to the levy at all, an order demanding or charging interest was not appealable under section 246(c) of the Act. It was further held that levy of interest is part of the process of assessment and although sections 143 and 144 do not specifically provide for the levy of interest and the levy is, in fact, attributable to section 139(8) or section 215, it is nevertheless a part of the process of assessing the tax liability of the assessee and, to that extent, it may be open to the assessee to dispute the levy in appeal provided he limits himself to the ground that he is not liable to the levy at all. (emphasis supplied). It was further held that the question whether a case is made out for waiver or reduction of the interest levied under section 139(8) or under section 215 cannot be the subject-matter of an appeal under section 246 (c). A Division Bench of this court also held in the case reported as CIT v. Mahabir Parshad and Sons, [1980] 125 ITR 165, that although an appeal agitating the issue of charging of interest in regard to both its leviability or quantum can be the su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 for the period April 1, 1981, to June 30, 1982, raised under section 215 of the Act. In so far as the demand of interest under section 220(2) of the Act is concerned, Mr. Syali's main contention was that the event which made the petitioner liable for the payment of interest on this count never arose inasmuch as there was no notice of demand earlier to the impugned notice which remained uncomplied with for a period of 35 days and that this being the essential condition to invoke the provisions of sub-section (2) of section 220, the demand was not sustainable. He submitted that, after the Income-tax Officer passed the order on September 21, 1984, the demand notice was issued in terms thereof on the same day, but on appeal being filed, the Commissioner of Income-tax (Appeals) granted conditional stay up to February 28, 1985, or disposal of the appeal subject to payment of Rs. 1,00,000 each month and that while the assessee was making payments in compliance with this order, the appeal itself was decided, vide order dated December 29, 1984, and a fresh demand was raised by notice dated January 10, 1985, pursuant to the order under appeal and that demand was fully met on January 24, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exhibit P-2A was removed and its finality was affirmed. Consequently, for the relevant period, exhibit P-2A is deemed to have operated in full vigour to make the petitioner liable in law by reason of the Tribunal's affirmative order. If this is the position in law, which I think it is, section 220(2) of the Income-tax Act was attracted in respect of the amount due from the petitioner as per exhibit P-2A dated December 1, 1973. It is that interest which is now demanded by the Income-tax Officer, vide exhibit P-6, and affirmed by the Commissioner by exhibit P-7. The challenge against the impugned orders accordingly fails." Mr. Syali, however, drew our attention to another judgment of the same court reported as ITO v. A. V. Thomas and Co. [1986] 160 ITR 818 (Ker), where, in a slightly different context, it was held that in case the assessee had paid the tax in response to notice under section 156, and the tax was reduced by the Appellate Assistant Commissioner and excess tax was refunded and after the Tribunal restored the original assessment order of the Income-tax Officer, interest would not be levied on the amount which became payable by the assessee, as a result of the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, no question of extinction of the demand or certificate in such cases arises and it shall abide the order in the proceedings under the Act which has become final and conclusive. The logical consequence of the view enunciated by the High Courts of Kerala and Calcutta, in so far as it has a bearing on the present case, would be that the first notice of demand, issued after the original assessment order passed by the Income-tax Officer cannot be deemed to have been extinguished by virtue of the appeal having been filed before the Commissioner of Income-tax (Appeals) or conditional stay of the operation of tile assessment having been allowed by the Commissioner of Income-tax (Appeals) pending disposal of the appeal before him or by virtue of subsequent reduction of the taxable income, for the reason that, under the order of the Tribunal which has attained finality tile parties, the original assessment has been restored with the result that the first demand notice which, at the most, lay in abeyance or suspension would stand revived and it would be apposite to hold that there was non compliance with this notice of demand apparently beyond 35 days so as to attract tile provisions of ..... 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