KHODEY BREWING AND DISTILLING INDUSTRIES LTD. VS COMMISSIONER OF WEALTH TAX
2002 P T D 524
[2501 T R 659]
[Supreme Court of India]
Present: B. N. Kirpal and Ms. Ruma Pal, JJ
KHODEY BREWING AND DISTILLING INDUSTRIES LTD.
versus
COMMISSIONER OF WEALTH TAX
Civil Appeal No.5843 of 2000, decided on 12/10/2001.
(Appeal by special leave from the judgment and order, dated November 30, 1999 of the Karnataka High Court in I.T.R.C. No.414 of 1998).
Income-tax---
----Interest---Delay in filing return---Deficiency in paying advance tax-- Assessment order---Direction for charging interest for delay and deficiency---Reassessment---Assessment reopened only for adding income from interest---Interest for delay and deficiency under direction in original assessment order also added---Appellate Tribunal holding that interest for delay and deficiency could not be charged in reassessment-- High Court---Reference of question whether direction for charging interest in original assessment does not survive---Decision of High Court---Savouring of appellate jurisdiction--- Decision set aside---Case remanded for rehearing reference---Indian Income Tax Act, 1961, Ss.139(8), 147, 215 & 256.
In the assessment order the Income-tax Officer had given directions for charging interest under section 139(8) (delay in filing the return) and section 215 (deficiency in advance tax) of the Income Tax Act, 1961. In reassessment proceedings only income of the assessee from interest was added; and, in view of the direction in the original assessment, interest was charged under sections 139(8) and 215 in the reassessment order. The assessee claimed that no such interest could be levied in the reassessment proceedings and the Appellate Tribunal accepted the claim The question whether the Tribunal was right in law in holding that inest under sections 139(8)/215 levied in the original assessment did not survive when a reassessment was done under section 148 was referred to the High Court. the High Court disposed of the reference holding that the Income-tax Officer should have passed separate orders for charging interest for delay and deficiency instead of incorporating the direction in the assessment order; that, since the original assessment had not been affected at all and only interest income was added in the reassessment proceedings, finality had been given to the assessment and the liability of the assessee for interest under sections 139(8) and 215 did not cease to exist, but that liability was restricted up to the date of assessment; and that it was only in respect of the interest income added that interest under those sections could not be charged (see '(2000) 243 ITR 836). On appeal to the Supreme Court:
Held, setting aside the decision of the High Court and remanding the matter to the High Court, that the High Court bad proceeded with the case as if it was sitting in appeal and exercising appellate jurisdiction rather than hearing a reference.
CIT v. Khodey Brewing and Distilling Industries Ltd. (2000) 243 ITR 836 set aside and matter remanded. ,
CIT v. Sun Engineering Works (P.) Ltd. (1992) 198 ITR 297. (SC) ref.
Joseph Vellapally, Senior Advocate (Dhruv Mehta, Ashok K. Kulkarni, S.K. Mehta and Ms. Shobha, Advocates with him) for Appellant.
Mukhul Rohtagi, Additional Solicitor-General for India (Ranbir Chandra and S.K. Dwivedi, Advocates with him) for Respondent.
ORDER
Special leave granted.
The Tribunal had stated the case and referred the following question of law to the High Court (see (2000) 243 ITR 836, 838):
"Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that interest under sections 139(8)/215 of the Act levied in the original assessment does not survive when a reassessment is done under section 148 of the Act particularly in view of the apex. Court's decision reported in CIT v. Sun Engineering Works (P.) Ltd. (1992) 198 ITR 297?"
A perusal of the judgment does not show that the High Court has answered the said question of law. The High Court appears to have proceeded 'with the case as if it was sitting in appeal and exercising the appellate jurisdiction rather than hearing a reference.
Without expressing any opinion on the merits of the case, the High Court should re-hear the reference and answer the question of law referred to it with or without refraining the same. We, accordingly, allow this appeal and set aside the judgment of the High Court with the aforesaid direction.
M.B.A./1056/FCOrder accordingly.