TMI Blog1983 (11) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... there was also s. 139(8) which allowed the ITO to waive or reduce the interest. In these three years, the amount of interest was Rs. 526 for the assessment year 1966-67, Rs. 5,324 for 1967-68 and Rs. 423 for the assessment year 1968-69. The assessee had moved under r. 117A(v) for a reduction or waiver of the interest on the ground that he was prevented by sufficient cause from furnishing the return within time. It appears that two letters dated January 1, 1969, and March 31, 1969, were written in this behalf. The orders of the ITO were passed on April 14, 1969, in respect of the three years, but there is no mention of the waiver application in any of the three orders. An appeal was taken by the assessee to the AAC, who, by order dated Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal does lie or not. A large majority of these judgments supports the view of the Department to the effect that no appeal lies and the AAC cannot interfere with the same. At the same time, we are under a handicap as no one has appeared for the assessee and we could answer this question satisfactorily only on hearing both sides. There is a view among some of the High Courts that the question of penal interest charged under s. 139 of the Act can be agitated in appeal if some other point is raised along with the same concerning the assessment. This High Court in CIT v. Mahabir Parshad Sons [1980] 125 ITR 165, has also so held. Most of the High Courts have taken the view that if this point, i.e., only the question of penal interest is invo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to s. 139. In the first place, sub-s. (8) was introduced by the Finance Act of 1963, with the purpose of permitting the ITO to waive or reduce the interest, and thereafter rule 117A was added to the I.T. Rules, 1962, with a view to dealing with such a situation. That rule gives five clauses under which the waiver or reduction can take place. The rule seems to suggest that in certain cases the waiver or reduction can take place though the word " may " has been used throughout. In the 5th case, where there is a late return, the assessee is permitted to lead evidence before the ITO to justify the waiver or reduction of interest. This is sub-clause (v) which is in the following terms : " any case in which the assessee produces evidence to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we are of the view that an appeal to the AAC is not competent, but this question is not free from difficulty and we would not like to give a final answer in a case like the present inasmuch as the ITO has not applied his mind to this case and if he had, we do not know what order he might have passed. In any case, it seems, prima facie, that in most cases an appeal would not lie to the AAC. In order to see what would be the effect of an actual order, an order would have to be passed in this case. In this connection, we may mention two possibilities, i.e., either the ITO will have to pass the order waiving or reducing the penalty or refusing to reduce or waive the penalty as part of the assessment order. Or, he would have to pass a separate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IAC regarding the waiver or reduction of the interest. As we have observed above, if an order had been passed by the ITO regarding the interest, then the assessee would know whether he had to file an appeal or a revision. But, there being no mention of the same, we have preferred to answer this reference by holding that the appeal does not lie to the AAC. At the same time, as there is no order, no revision lies to the Commissioner. So, the only possible direction that can be given is that this is a case in which the ITO has yet to pass an order waiving or reducing the interest or refusing to waive or reduce the interest and only after the order is passed can it be determined whether an appeal or revision lies. The reference is answered acc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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