TMI Blog2004 (11) TMI 278X X X X Extracts X X X X X X X X Extracts X X X X ..... me of Rs. 90,65,130 and tax payable thereon was determined at Rs. 54,39,078. After giving credit to the taxes paid prior to completion of assessment amounting to Rs. 53,00,000 a net sum of Rs. 1,39,078 determined as payable in the order under section 158BC(c) dated 24-5-1999. The A/R stated that this amount of Rs. 1,39,078 was collected by the Assessing Officer by adjusting the assessee's refund due for assessment year 1996-97, assessment for which was completed prior to completion of the block assessment. In the order dated 24th May, 1999, the Assessing Officer had not charged interest under section 158BFA(1) for delay in filing of the block return. The Assessing Officer noted this omission subsequent to 24-5-1999 and therefore issued notice under section 154 of the Act. In the said notice the Assessing Officer stated that since no interest under section 158BFA was charged in the order under section 158BC(c) there was a mistake apparent from record which needed rectification under section 154. In response to the said notice under section 154, the assessee explained before the Assessing Officer that the notice under section 158BC(1) was issued to the assessee in November 1997 when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rguments at length but ultimately upheld the order passed under section 154/158BC(c) levying interest under section 158BFA(1). According to the CIT(A) the levy of interest under section 158BFA(1) like interest under section 234A, was mandatory and the Assessing Officer did not have discretion in the matter of charging such interest. He further held that provisions of sections 158BFA(1) and 234A were pari materia and therefore charge of interest was statutory and it did not even require the Assessing Officer to grant an opportunity of being heard to the assessee before such interest was levied. The CIT(A) further held that since the Assessing Officer had not charged the statutory interest while passing the order under section 158BC(c) of the Act, such omission was clearly an error of law as the Assessing Officer had failed to comply with the statutory requirements and therefore it was a mistake apparent from record which could be rectified under section 154 of the Act. The CIT(A) also held that none of the tax authorities had any power or authority to grant waiver of such statutory interest. He, therefore, held that the failure to levy such statutory interest was a manifest error, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1). He further submitted that even though the levy of interest was statutory such interest should have been levied by the Assessing Officer by passing an appropriate order within the time prescribed in the Act. Merely because the levy of interest was statutory, the order levying such interest could not be passed beyond the period of limitation. He, therefore, submitted that there was no mistake which could be rectified under section 154 of the Act. He further submitted that in the present case the assessee had paid whole of the admitted tax on or before 29th December, 1997 and therefore levy of interest for the whole of the nine month period was unjustified and therefore non-levy of interest under section 158BFA(1) for the period of 9 months could not said to be a mistake apparent from record. He relied on the decision of the Delhi High Court in the case of Dr. Pranoy Roy v. CIT [2002] 254 ITR 755 where the Delhi High Court held that where the assessee had paid whole of the admitted tax but only delayed filing of the return, no interest under section 234A could be charged merely because there was a delay in filing of the return. The A/R, therefore, submitted since in the present ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing Officer to determine the undisclosed income for the block period and determine the tax payable thereon. The first argument of the assessee is that the said section nowhere requires the Assessing Officer to determine the interest or any other amount payable on the undisclosed income. It was pointed out that section 158BC(c) used the expression 'determine tax payable' in contradistinction to the term 'determine sum payable' as used in section 143(3) of the Act and on the strength of the same it was argued that by not determining the interest payable under section 158BFA no mistake was committed by the Assessing Officer in the order passed under section 158BC. On the first sight the above argument looks interesting but on the closer examination of the issue and taking into consideration the whole scheme of the Act, we do not find any force in it. In our considered opinion, the determination of tax payable stated in section 158BC(c) also includes interest payable under section 158BFA of the Act. In the case of Assam Forest Products (P.) Ltd. v. CIT [1989] 180 ITR 478(Gauhati) it was held that interest payable has to be regarded as part and parcel of liability to pay tax. Further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charge interest under section 158BFA of the Act. In our considered opinion, there could not be any question of rectifying an order where there exists no order at all which could be rectified. In the instant case, in the assessment order no order to the effect to charge of interest was passed and hence, in our considered opinion question of rectifying the same does not arise. Our above view also finds support from the decision of the Hon'ble Supreme Court in the case of T.S. Balaram, ITO v. Volkart Bros. [1971] 82 ITR 50 that under section 154 of the Act all types of failures on the part of the Assessing Officer cannot be rectified and only the mistakes in the order manifest from the face of records can be rectified. Where the issue is debatable more than one judicial view is possible then in respect of such issue it could not be said to be a mistake apparent from record. In the recent decision of the Chandigarh Bench of the Income Tax Appellate Tribunal in the case of Kangra Bajri Co. v. Asstt. CIT [2004] 90 ITD 124, it was held that whether the Assessing Officer could charge interest by resorting to provisions of section 154 in a case where he did not charge such interest even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... delay in grant of inspection/photocopies of the seized documents. In the circumstances, in our considered opinion the case of the assessee is squarely covered by the decision of the Hon'ble Patna Bench of the Tribunal in the case of Rakesh Kumar Pandey. Hence, respectfully following the same also in our considered opinion the charge of interest under section 158BFA(1) in the instant case was not justified. 9. Lastly, in the instant case it is not in dispute that the admitted tax was paid by the assessee on or before 29th December, 1997. In view of the decision of the Hon'ble Delhi High Court in the case of Dr. Pranoy Roy v. CIT [2002] 254 ITR 755 wherein it was held that where the assessee had paid whole of the admitted tax but only delayed filing of the return, no interest under section 234A could be charged merely because there was a delay in filing of the return, the non-charge of interest under section 158BFA(1) in the instant case cannot be held to be such an obvious mistake which can be rectified under section 154 of the Act. 10. We, therefore are of the considered view that the order under section 154 dated 19-7-2000 in the instant case is not sustainable and, according ..... X X X X Extracts X X X X X X X X Extracts X X X X
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