TMI Blog1984 (1) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... unts by Rs. 66,399. After enquiry, the ITO came to the conclusion that the assessee was able to explain the source for the said deposit to the extent of Rs. 35,000 before he left India and the excess of deposit over Rs. 35,000 was taxed as income from undisclosed sources. The assessment was completed under s. 143(3) read with s. 147(1). In the assessment order, the ITO also levied interest under s. 139(8) and s. 217 of the Act. In the appeal preferred by the assessee against the assessment order. it was contended, inter alia, that the levy of interest under s. 139(8) and s. 217 was not sustainable, since the assessment had been done under s. 147 and not under s. 143 or s. 144 so as to attract levy of interest under s. 139(8) and s. 217. The AAC dismissed the assessee's appeal and held that the assessment reopened under s. 147 was done under s. 143(3) read with s. 147 and rejected the contention of the assessee that no interest was leviable in the case of an assessment done under s. 147. The Tribunal, on further appeal by the assessee, reversed the AAC's order and held that levy of interest is permissible in reassessment proceedings, but cancelled the levy with liberty to the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see can insist on the ITO to make a summary assessment for purposes of obtaining refund if the regular assessment of the assessee is not likely to be completed within six months from the date of -furnishing of the return. Similarly facility is provided for summary assessment in the case of a firm registered under the Act. Under sub-s. (4) of s. 141 A, provision is made for refund of excess amount, if any, paid under sub-s. (1) after a " regular assessment " has been made. Sub-section (5) provides that nothing done or suffered by reason or in consequence of any provisional assessment made under sub-s. (1) shall prejudice the determination, on the merits, of any issue which may arise in the course of the assessment. Sub-section (6) provides that there shall be no right of appeal against a provisional assessment made under sub-s. (1). These provisions contained in s. 140A and s. 141 (before deletion of s. 141 with effect from April 1, 1971) and s. 141A, provide for summary assessments subject to the final determination in a regular assessment to be done under s. 143 or s. 144, as the case may be. Section 142 lays down the procedure for enquiry before an assessment. A notice is c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee and consideration of the draft order and the objections of the assessee by the IAC. This procedure applies even to cases reopened under s. 148. Under s. 146, an assessee can make an application for cancellation of an assessment made under s. 144 and for a fresh assessment. Next we come to s. 147 which provides for assessment of income which has escaped assessment. This provision, empowers the ITO to assess or reassess the income in respect of which the assessee has failed to make return or has omitted to disclose in the return or there is a failure to disclose fully and truly all material facts necessary for assessment of the income. Under cl. (b) of s. 147, the ITO can take steps to assess or reassess or recompute the loss or depreciation allowance, as the case may be, in consequence of information in his possession and has reason to believe that the income chargeable to tax has escaped assessment in any assessment year. Section 148 contemplates issue of notice before making an assessment, reassessment or recomputation under s. 147 and the ITO is required to serve on the assessee a notice as contemplated under s. 139(2) and the section also provides that the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt is made. Then we come to the crucial provision, sub-s. (8) of s. 139, which provides for levy of interest on every assessee on the amount of tax payable on the total income as determined on regular assessment as reduced by the advance tax, if any, paid and any tax deducted at source. Interest is levied if a return is not furnished at all or not furnished in time under sub-s. (1) or prescribed by sub-s. (4). It is to be noted that there was no such provision in the Indian I.T. Act, 1922. However, there was a provision for levy of interest under s. 18A(6) in cases where the assessee failed to make advance payment on the basis of his own estimate of income or such payment fell short by 80% of the tax determined on the basis of the regular assessment. The provision for levy of interest was introduced in the 1961 Act in s. 139(4) and it was substituted by the Taxation Laws (Amendment) Act, 1975, by sub-s. (8). The ITO may reduce or waive interest under the proviso to this sub-section read with rule 117A and such discretion can also be exercised by the Commissioner under s. 273A(1)(iii). The question that arises then is : " Whether the assessment done after issue of notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her the expression " regular assessment " as defined under s. 2(40) means and includes as a necessary corollary, an assessment under s. 147 also. Mr. Prasad mainly relies on the definition of " regular assessment " in s. 2(40) in support of his contention. Such a definition was not found in the 1922 Act and under the 1961 Act it is specifically defined to mean only assessments made under s. 143 or 144. According to him, this definition is applicable particularly in the context in which the expression occurs in ss. 139(8), 215, 216 and 217 of the Act. Sri Prasad further submitted that interest should be charged only in cases of assessments made under s. 143 or 144, subject to the rules governing such levy of interest and that appears to be the intention of Parliament in defining the expression " regular assessment ". The learned counsel also drew our attention to the wordings of s. 148 under which a notice is contemplated to be issued to the assessee before action is taken to assess/ reassess the income which has escaped assessment. There is considerable force in the submission of Sri Prasad. The expression " regular assessment " should receive the same meaning wherever it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proper." Relying on this decision, the contention on behalf of the Revenue is, that the provisions of s. 139 in its entirety including levy of interest, would be attracted in an assessment done after issue of notice under s. 148 and the phrase " as far as may be " must be interpreted to apply to all assessments under the Act. This contention overlooks the definition of " regular assessment" which the Legislature has expressly provided for with all the implications thereof. When the said expression is defined to mean only assessments made under certain sections of the Act, it would be beyond the jurisdiction of any court to give it a wider and comprehensive meaning so as to include all assessments done under the Act, whether under s. 143/144 or completed after issue of notice under s. 148. As observed by the Calcutta High Court in Surajmal Ganeshram v. CIT [1979] 120 ITR 715, assessments under s. 143/t44 fall under ,I distinct category of assessments and the assessments made under s. 147 are not covered by the definition section. There is considerable force in the contention urged on behalf of the Department that " regular assessment ", if so construed, would cause lot of d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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