1990 (3) TMI 16 - HC - Income Tax

Summary

Issues:
Challenge to the validity and legality of an order under section 154 of the Income-tax Act, 1961 based on the jurisdiction of the Commissioner to withdraw a relief granted under section 264.

Analysis:
The petitioner, a company, challenged the order dated January 30, 1986, passed by the Commissioner of Income-tax, Bombay City IV, under section 154 of the Income-tax Act, 1961. The issue revolved around the assessment years 1979-80 and 1982-83, with specific focus on the assessment year 1979-80. The Income-tax Officer had initially directed the petitioner to pay interest under section 216 for deferred payment of advance tax during the assessment. The petitioner appealed against the order of assessment, but did not contest the interest levy in the appeal. Subsequently, the Commissioner, under section 264, deleted the interest levied under section 216. However, the Commissioner later cancelled this order under section 154, citing lack of jurisdiction due to the order being the subject of appeal before the Commissioner (Appeals).

The main question in the petition was whether the Commissioner had the authority to withdraw the order passed under section 264 based on an apparent mistake from the record. The court examined whether the order of assessment and the order charging interest under section 216 should be considered as one order for appeal purposes. The court noted that under section 246 of the Income-tax Act, 1961, the assessment order and the order charging interest under section 216 are separately appealable, indicating they are distinct orders. The court emphasized that the mere presence of both orders on the same document does not merge them into one order for appeal purposes.

A similar issue had been addressed by the Supreme Court in a previous case, where it was held that an order granting registration was separate from the order of assessment, and the absence of an appeal against the registration did not make it the subject of appeal. In the current case, the Commissioner admitted that no appeal was filed against the interest charged under section 216, implying the petitioner had accepted the levy. As a result, the court concluded that the order passed under section 264 did not contain any apparent mistake justifying its withdrawal under section 154. Therefore, the Commissioner's order under section 154 was deemed to be without jurisdiction and was quashed.

In the final judgment, the court made the rule absolute in favor of the petitioner, granting a refund of any interest paid based on the impugned order. No costs were awarded in the matter.