1985 (12) TMI 90 - AT - Income Tax

Summary

Issues:
- Appeal against the Commissioner (Appeals) assuming appellate jurisdiction over interest charged under section 217(1A) of the Income-tax Act, 1961.
- Merits of charging interest under section 217(1A) for default in filing the statement of advance tax.

Analysis:
1. Issue 1 - Appeal Jurisdiction:
The department appealed against the Commissioner (Appeals) assuming jurisdiction over interest charged under section 217. The department contended that the matter was not appealable, citing the decision in CIT v. Geeta Ram Kali Ram. On the other hand, the assessee's representative supported the Commissioner's jurisdiction, referring to the decision in CIT v. Lalit Prasad Rohini Kumar. The ITAT held that the Commissioner validly assumed jurisdiction as the assessee challenged the levy of interest along with other grounds. The ITAT followed the decision in New Swadeshi Mills Ltd. and upheld the Commissioner's order.

2. Issue 2 - Merits of Charging Interest under Section 217(1A):
The key contention was whether interest under section 217(1A) should be charged for default in filing the advance tax statement. The Commissioner (Appeals) found that the assessee had paid advance tax on time but filed the statement late. The Commissioner concluded that the spirit of section 217 was to collect tax promptly, and since the tax was paid as per schedule, no interest should be levied. The ITAT agreed, emphasizing that the filing of the statement was a means to collect tax timely, and since the tax was paid in full, no interest should be charged. The ITAT also noted that the ITO's assessment order did not specify the amount or manner of computation of interest, further supporting the decision to uphold the Commissioner's order.

In conclusion, the ITAT dismissed the appeal, affirming the Commissioner (Appeals) decision that no interest should be charged under section 217(1A) as the tax was paid on time despite a delay in filing the advance tax statement. The judgment provided clarity on the jurisdiction of the Commissioner (Appeals) and the interpretation of provisions related to charging interest for advance tax defaults under the Income-tax Act, 1961.