1980 (10) TMI 32 - HC - Income Tax

Summary

Issues:
Assessment of total income for the year 1966-67, imposition of penal interest by the ITO, appeal before AAC, appeal before the Tribunal, question of appealability of interest charged under section 215 of the Income-tax Act, 1961.

Analysis:
For the assessment year 1966-67, the ITO assessed the company's total income and imposed penal interest due to a shortfall in advance tax payment. The AAC granted relief on the total income but dismissed the appeal on penal interest, citing lack of appeal provision against interest charges under section 215. The Tribunal, however, allowed the appeal, stating that interest under section 215 is part of the assessment order and appealable under section 246(c). The revenue challenged the Tribunal's decision, questioning the appealability of interest charged under section 215.

To address the question of law, the court examined section 215 of the Income-tax Act, which outlines the calculation and payment of interest on advance tax shortfalls. It noted that while section 246 allows appeals against orders under various sections, it does not mention interest charged under section 215, indicating the legislative intent to exclude appeals for such orders. The court emphasized that the statute mandates the refund of excess interest under certain circumstances, eliminating the need for a specific appeal provision for interest charged under section 215.

The court clarified that the absence of an appeal provision for interest under section 215 does not deprive the assessee of the right to claim a refund as per the statute's mandate. It emphasized that the right of appeal is statutory, and if not provided for in the law, it cannot be exercised. The court concluded that the Tribunal's remand to the AAC for interest relief was unnecessary, as the assessee is entitled to interest refund under section 215(3) regardless of the appeal decision. The court ruled against the assessee, affirming that the right to interest refund is guaranteed by the statute, irrespective of the appeal process.

In light of the above analysis, the court answered the question of law in the negative, favoring the revenue. It emphasized that the assessee's entitlement to interest refund under section 215(3) is not affected by the appeal process, and compliance with the statutory mandate is required. The court made it clear that the absence of a specific appeal provision for interest under section 215 does not diminish the assessee's right to claim a refund as mandated by the law.