1991 (9) TMI 110 - AT - Income Tax

Summary

Issues:
1. Maintainability of appeal to the CIT(A) against the levy of interest under section 220(2) of the Income-Tax Act, 1961.

Detailed Analysis:
The judgment revolves around the sole issue of the maintainability of the assessee's appeal to the CIT(A) against the levy of interest by the ITO under section 220(2) of the Income-Tax Act, 1961. The appellant, an Indian company, contested the interest levied under various sections, particularly under section 220(2) of the Act. The ITO determined the total income and tax due from the assessee, including interest under section 220(2), totaling Rs. 2,08,014. The appellant objected to this interest levy, leading to an appeal to the CIT(A), which was dismissed. The appellant then approached the Tribunal challenging the CIT(A)'s decision.

The Tribunal, after hearing both parties, upheld the CIT(A)'s order, emphasizing that the appellant's appeal solely pertained to the interest levy under section 220(2) and nothing else. The appellant argued that since the interest was part of the order under section 251, it was appealable under section 246(2)(a) read with section 246(1)(c) of the Act. However, the Tribunal clarified that the right of appeal must be explicitly provided for in the statute. It noted that section 246(1)(c)/246(2)(a) did not confer a right of appeal against the charging of interest under section 220(2). The Tribunal highlighted that the charging of interest under section 220(2) is automatic and statutory, with no discretion left to the ITO. The only authority with the power to reduce or waive such interest is the Chief Commissioner or Commissioner under section 220(2A) of the Act.

The Tribunal further pointed out that the appellant's request for waiver of interest under section 220(2) was pending with the CIT, indicating that the remedy was available through the appropriate channels. The Tribunal concurred with the CIT(A)'s reasoning that no appeal would lie against the interest charged under section 220(2) of the Act. Consequently, the Tribunal confirmed the CIT(A)'s order and dismissed the appeal, concluding that the appellant was pursuing the wrong avenue by challenging the interest levy through an appeal rather than through the prescribed remedy.

In conclusion, the judgment delves into the intricacies of appeal rights concerning interest levies under the Income-Tax Act, emphasizing the statutory nature of interest under section 220(2) and the absence of a specific appeal provision against such interest charges. The Tribunal's decision underscores the importance of following the prescribed procedures and remedies under the law in addressing tax-related disputes.