TMI Blog1995 (12) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... ere was, however, delay in the deposit of the tax into the account of the Government for the above assessment years. The Assessing Officer, by impugned orders dated 21-5-1990, passed orders for the above assessment years levying interest under section 201(1A) of the Act. 3. Aggrieved by the said order, the assessee took up the matter in appeal before the CIT(A) and it was submitted that the Assessing Officer was not justified in charging interest after such a lapse of time and that even if there were no limitations provided, the orders charging interest should have been passed within reasonable time of the default. Reliance was placed on the decision of the Hon'ble Kerala High Court in the case of Krishna Bhatta v. Agrl. ITO [1981] 132 I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (P.) Ltd. v. CIT [1995] 212 ITR 92 and in its earlier decision in the case of Bennet Coleman Co. Ltd v. VP. Damle, Third ITO [1986] 157 ITR 812. It is also an admitted position that the bar of recovery under the provisions of section 231 will not stand in the way of the assessee to pay interest under section 201(1A) of the Act, and the proceedings initiated by the revenue authorities for levy of interest under section 201(1A) are not barred by limitation as held by the Hon'ble High Court of Calcutta in the case of Grindlays Bank Ltd v. CIT [1992] 193 ITR 457 and in the case of British Airways v. CIT [1992] 193 ITR 439. 6. It is, however, the claim of the learned counsel of the assessee before us that in the absence of time-limit for i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Ltd v. CIT [1987] 166 ITR 278 (Ker.) and in the cases cited before the CIT(A). The decisions of the Hon'ble High Court of Bombay in the case of Indian Hume Pipe Co. Ltd v. CIT [1991] 189 ITR 683 and of the Hon'ble Calcutta High Court in the case of Vinar Co. v. ITO [1992] 193 ITR 300 and of the Hon'ble Calcutta High Court in the case of CIT v. Dunlop Rubber Co. (India) Ltd. [1980] 121 ITR 476 are also cited for the above proposition. 7. On the other hand, Shri M.P. Kotwal, learned Departmental Representative maintained that the issue is concluded by the decisions of the jurisdictional High Court. Interest under section 201(1A) of the Act is mandatory and automatic and no limitation can be placed for the recovery of such liability whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceedings within a reasonable time even in the absence of a " time-limit " prescribed by the statute. The Hon'ble Bombay High Court considered the question of " reasonable time " in the context of surtax assessment where there is no time-limit prescribed for completion of assessment in the case of Indian Hume Pipe Co. Ltd. In that case, the Hon'ble High Court held that the surtax assessment completed within less than two years cannot be said to be an unreasonable period. It was further held that what will constitute reasonable time will depend on the nature of the order and the circumstances of the case. 9. The finality of any proceedings is implicit in the scheme of the Income-tax Act. All the proceedings including assessment proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, provides for filing the return under section 206 within one month of the end of the financial year or June in each of the years. This is to enable the Assessing Officer to monitor the payment of pre-assessment taxes before dealing with the regular assessment proceedings. In this view of the matter, it appears that the Legislature did not consider it necessary to put even time-limit for levy of interest under section 201(1A) of the Act, as the proceedings under section 201 of the Act are expected to be finalised before the assessment is completed. 11. If the facts of the case of the assessee are examined in the light of the above decisions, the contentions of the assessee have considerable merit. There appears to be no proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ----------------------------- In such a case, even if the Assessing Officer failed to scrutinise the short deduction of tax or delay in payment of the annual returns in the normal time, he could have done the same at the time of passing the assessment order or when he gives effect to the appellate order of the CIT(A). Nothing appears to have been done. However, on 25-1-1990, the Assessing Officer passed the impugned orders for the above assessment years and levied interest under section 201(1A) of the Act. From the analysis of the above facts, it is seen that the first order was passed on 4-1-1982 and the CIT(A) passed the appellate order on 30-3-1984. The previous year is the year ending 31-3-1978. In that view of the matter, the delay o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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