TMI Blog1978 (2) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... ecame entitled to a refund of Rs. 1,21,700 as against a demand of Rs. 1,37,615 raised originally. The ITO issued a refund order but did not say a word in the order whether or not any amount was payable to the assessee as interest under s. 214 and no interest was, in fact, computed or paid. The assessee did not file an appeal against the ITO's order dt. 18th march, 1974 even though no interest under s. 214 was granted. 2. Against that part of the order of the AAC whereby he had confirmed the disallowance of relief claimed under s. 80-I the assessee had gone in further appeal to the Tribunal. By its order dt. 16th May, 1974 Bombay Bench 'E; of the Tribunal restored the appeal to the file of the AAC directing him to consider the assessee's claim for deduction under s. 80-I. By order dt. 28th Aug., 1974 the AAC accepted the submissions made on behalf of the assessee and held that the assessee was entitled to deduction under s. 80-I and directed the ITO to compute the deduction. The ITO gave effect to the latter order of the AAC vide his order dt. 31st Dec., 1974. This resulted in a reduction of total income to Rs. 32,12,854 and in a further refund of Rs. 1,25,168. This time also the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasons for coming to the conclusion on the point in dispute, it is desirable to refer to some almost identical submissions of Shri Tamhane, the Sr. Departmental Representative and Shri Dastur, the learned Counsel for the assessee, which are, of course, for cross purpose. Both suggest that the appeal could have been decided by an ordinary division bench of the Tribunal, and it was not necessary for the larger bench to hear and dispose it. Shri Tamhane has argued that one of his submissions was going to be that assuming non-granting of interest under s. 214 was appealable, this ground could not be taken in an appeal filed against the order of the ITO dt. 30th Dec., 1974 as the assessee was aggrieved for this when the ITO passed his order dt. 18th March, 1974 against which no appeal was, admittedly filed. Since there was no difference of opinion between the benches of the Tribunal on this aspect of the matter, he stated that it was not really necessary for the larger bench to consider the dispute. Shri Dastur, on the other hands, contended that the only ground given by the DB in the case Caltax Oil Refinery (ITA NO. 2702 (Bom) of 1974-75, ITAT, Bombay Bench) for not following the SB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the IT Act. It is significant that before us there is a SB decision taking a particular view. There is then a DB decision where a contrary view has been taken following the Gujarat High Court's decision in (100 ITR 603), Bombay High Court in (108 ITR 961) has also not directly dealt with the issue before us. On the other hand, both the parties are relying on the same decision in (108 ITR 961) for cross purposes. In the mean time other High Court's decisions are also available. Therefore, it is in the fitness of things that the appeal is heard and decided by a larger bench. 7. Coming them to the question of competence of appeal, it may be observed that granting or non-granting of interest under s. 214 is not one of the orders specifically mentioned as appealable in s. 246 and it is a settled law that right of appeal is a creature of statute AIR 1974 SC 1126, 1229. Unless the statute provides for an appeal, there would be no inherent right to appeal. However, in case there is any ambiguity, the relevant provisions must be construed in favour of existence of a right of appeal (66 ITR 319) and (81 ITR 89). It is in this background that we have to examine whether right of appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which are important from our point of view, have been examined and considered by the Bombay High Court in its aforesaid Full Bench decision in the following words: "As regards Mathuradas B. Mohta's case (1965) 56 ITR 269 (Bom), it is true that the Division Bench has enquated charging of penal interest under s. 18-A(8)_ with imposition of tax liability and has, therefore, taken the view that when an assessee would be disputing his liability to pay penalty interest, he would fall within the phrase "assessee denying his liability to be assessed under this Act" and, therefore, would have a right of appeal under s. 30 of the Act. But it may be stated that the assessee had paid advance tax in his capacity as the karta of the HUF and was denying his liability to pay advance tax in his status as an individual and when the ITO charged penal interest under s. 18-A(8) to him for having failed to submit an estimate of his income any pay advance tax in his status as an individual, he preferred an appeal to the AAC. It would thus be clear that the assessee had really raised the basis issued that he was not liable to be assessed to advance tax at all in his status as an individual. This becom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igh Court decision that their Lordships have approved or disapproved their earlier decision in (56 ITR 269) (which was the main plank for the SB decision). 10. We have already referred to their Lordships' observations hereinabove. As regards its decision in 56 ITR 269, their Lordships have evidently not accepted the reason given for the decision, namely, denying liability to pay interest amounted to denying liability to pay tax. No doubt. they have agreed with the final conclusion but that is for the reason that the basic issue i.e. the liability to pay advance tax, had been raised by the assessee in appeal and thus in fact liability to be assessed under the Act was denied. On the other hand, their Lordships appear to have agreed with the reason given by the Gujarat High Court for its conclusion but have not agreed with the conclusion, as in their view an important aspect that the ITO had impliedly decided the question that the assessee was under a liability to be assessed to advance tax, was overlooked by the said High Court. In view of this analysis of ours of the Bombay and Gujarat decisions in 56 ITR 269 and 100 ITR 603 respectively after carefully going through the latest F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions and/or disallowances, the assessee should, either go to the Tribunal or to the CIT but not to both. It was then stated that this could hardly be said to be a remedy. He, however, made it clear that he was not asking the Tribunal to hold the appeal competent on the ground of equity. His attempt was only to show that the legislature could not have possible intended that the subject would be remedlyless. 12. However, all these arguments appear to be of little consequence in view of the fact that the settled law is that the legislative intention if to be first found in the expression used in the section and reference to subject clauses, etc., would be justified only in case of ambiguity. As stated earlier, it is not the assessee's case that the right to appeal against non-granting of interest under s. 214 is found in the expression "denying his liability to be assessed under the Act". The contention is that the right of appeal is referable to the other expression, namely, "objections to the amount of tax determined,'. It is in this context that the word "tax" assumes importance. As defined in s. 2(43), tax certainly does not include interest. There does not appear to us to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the right of appeal is not against the determination of sum payable or refundable and unless the assessee objects to the tax determined as distinct from the sum determined, it is not possible to accept the assessee's submissions. In fact, the use of the words "tax", "interest", "penalty", "fine" or "any other sum" in s. 156 supports the Department contention that interest is separate from tax though it might be included in the sum to be determined payable by or refundable to the assessee. This also appears to be the view of the Bombay High court (108 ITR 961) from the manner in which their Lordships have considered, examined and explained its own decision in 56 ITR 269, Gujarat High Court's decision in 100 ITR 603 and other High Court's decisions. 14. It may not be out of place to observe that recently the question of appealability of levy of interest under s. 139 and s. 214 again came up for consideration before the Gujarat High Court. Their Lordships have, by their decision dt. 7th Sept., 1977 in the case of Shri Bhikubhai N. Shah vs. CIT 1978 CTR (Guj) 172 (still unreported) held: "In the light of the discussion set out hereinabove, our conclusion, therefore, is as follo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed against the ITO's order dt. 31st Dec., 1974 (as distinct from the order dt. 18th Dec., 1974 in which the refund payable to the assessee was determined for the first time and against which no appeal was filed for non-granting of interest under s. 214) was incompetent. (2) The amount of refund payable determined as a result of the orders of the ITO dt. 18th March, 1974 and 31st March, 1974 was not a refund of advance tax paid in excess of the amount of tax determined on regular assessment within the meaning of s. 214 and therefore, the assessee was not entitled to interest under s. 214. (3) Assuming the assessee was entitled to interest under s. 214 of on the amount of refund payable determined as a result of the orders of the ITO dt. 18th March, 1974 and 31st Dec., 1974, the interest, if any, would be payable upto the date of regular assessment only which, in this case would be the first assessment made by the ITO under s. 143 i.e. the order dt. 30th Dec., 1972. Shri Dastur, the learned Counsel for the assessee, had repelled each and every contention raised by the Departmental Representative in this behalf. In particular, he had placed reliance on the Calcutta High Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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