1984 (6) TMI 66 - AT - Income Tax

Summary

Issues:
1. Validity of levy of interest under s. 215 of the IT Act in an appeal against an order refusing to exercise powers under s. 154.
2. Consideration of last installment tax payment made after the stipulated date as advance tax.
3. Entitlement to an order of rectification under section 154 of the IT Act.
4. Applicability of provisions of the Indian Contract Act regarding appropriation of debt to payments made as advance tax.

Analysis:

Issue 1:
The Revenue sought a reference to the High Court regarding the validity of levy of interest under s. 215 of the IT Act in an appeal against an order refusing to exercise powers under s. 154. The Tribunal declined to make the reference as it held that the validity of levy of interest under s. 215 was not dealt with in the order. The Tribunal's decision was based on specific findings in paras 6 & 10 of the order, where it was clear that the issue was not addressed.

Issue 2:
Regarding the consideration of the last installment tax payment made after the stipulated date as advance tax, the CIT(A) had dismissed the appeal of the assessee, stating that the last payment could not be considered part of the advance tax. However, the Tribunal, on appeal by the assessee, allowed the appeal based on s. 154 and held that all three payments were treated as advance tax by the ITO. The Tribunal's decision was supported by factual findings and was not challenged, leading to the rejection of the proposed reference on this issue.

Issue 3:
The question of entitlement to rectification under section 154 was raised. The Tribunal allowed rectification based on factual findings in paras 6 & 7.0 of the order. As the rectification was granted on factual grounds, the Tribunal found no legal question arising from this issue and declined to make a reference to the High Court.

Issue 4:
The applicability of the provisions of the Indian Contract Act regarding appropriation of debt to payments made as advance tax was also raised. The Tribunal held that the provisions of the Indian Contract Act applied as the payments were made along with advance tax challans based on estimates filed. The Tribunal found that specific directions regarding appropriation were given by the payer and accepted by the ITO, making the provisions of the Indian Contract Act applicable. Consequently, the Tribunal rejected the application for reference on this issue, as no referable question of law arose.

In conclusion, the Tribunal declined to make a reference to the High Court on all four issues raised by the Revenue, citing specific reasons for each issue based on the findings and conclusions in the order.