COMMISSIONER OF INCOME-TAX VS KAMLAPAT MOTI LAL
1998 P T D 2334
[222 I T R 9]
[Allahabad High Court (India)]
Before M. Katju and Dr. B. S. Chauhan, JJ
COMMISSIONER OF INCOME-TAX
versus
KAMLAPAT MOTI LAL
Income-tax Reference No. 156 of 1980, decided on 03/04/1996.
Income-tax---
----Interest---Cannot be levied in case of reassessment under 5.148---Indian Income Tax Act, 1961, Ss.139(8) & 148.
Held, that interest under section 139(8) of the Income Tax Act, 1961, cannot be levied in reassessment proceedings under section 148.
Charles D'Souza v. CIT (1984) 147 ITR 694 (Kar.) and CIT v. Kapoor Chand Ram Chand (1995) 216 318 (Raj.) fol.
JUDGMENT
This is an income-tax reference under section 256 of the Income Tax Act, 1961, in which the following two questions have been referred for our opinion:
"(1) Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in holding that the provisions of section 139(8) of the act have no application to reassessment proceedings?
(2) Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct that the matter was highly debatable and that the provisions of section 154 of the Act could not be invoked for levying interest under section 139(8) of the Act?"
The facts of this case are that original return was submitted by the assessee on September 7, 1968, and the original assessment order for the assessment year 1968-69 was passed on December 31, 1971. The assessment was subsequently reopened under section 148 and a fresh assessment order was passed on December 30, 1972. In this order dated December 30, 1972, there was no order of paying interest under section 139(8) and hence notice under section 154 was served on the assessee and ultimately it was held that interest under section 139(8) should also be charged. In appeal, the Appellate Assistant Commissioner cancelled the Income Tax Officer's order and the Department's appeal to the Tribunal failed. Hence, this reference.
The short question before us is whether interest under section 139(8) can be charged in proceedings under section 148 for reassessment. This point is covered by a decision of a Division Bench of the Karnataka High Court in the case of Charles D'Souza v. CIT (1984) 147 ITR 694, as well as a decision of the Rajasthan High Court-Jaipur Bench in the case of CIT v. Kapoor Chand Ram Chand (1995) 216 ITR 318. These decisions have referred to earlier decisions also, which show that a consistent view has been taken on this point by the various High Courts holding that interest under section 139(8) cannot be levied in a case of assessment or reassessment under section 147 of the Act.
Following these decisions, we answer the first question in the affirmative, i.e., in favour of the assessee and against the Department. The second question becomes academic, and hence it need not be answered.
No order as to costs.
M.B.A./1504/FC ??????????????????????????????????????????????????????????????????????????????? Reference answered.