1991 (12) TMI 110 - AT - Income Tax

Summary

Issues:
- Whether the revised returns filed by the assessees were under the Amnesty Scheme.
- Whether the assessees were liable to pay interest under sections 139(8) and 217 of the Income-tax Act, 1961.
- Whether the CIT(Appeals) erred in deleting the interest under sections 139(8) and 217 based on the Amnesty Scheme.
- Whether the benefits under the Amnesty Scheme applied to the additional income disclosed in the revised returns.
- Whether the interest under sections 139(8) and 217 was rightly charged by the IAC(Assessments).

Analysis:
1. The appeals by the Revenue involved two different assessees for the assessment year 1984-85, with common contentions. The assessees filed revised returns under the Amnesty Scheme, claiming immunity from interest under sections 139(8) and 217. The CIT(Appeals) held in favor of the assessees, vacating the levy of interest based on the Amnesty Scheme.

2. In the first case (ITA No. 812), the registered firm filed a revised return under the Amnesty Scheme, disclosing additional income. The CIT(Appeals) upheld the firm's claim under the Amnesty Scheme and deleted the interest levied by the IAC(Assessments) under sections 139(8) and 217. The Revenue contended that the revised returns were not under the Amnesty Scheme, aiming to avoid interest liability.

3. In the second case (ITA No. 813), a similar scenario occurred where the firm filed a revised return under the Amnesty Scheme, which the CIT(Appeals) accepted. The Revenue challenged the deletion of interest under sections 139(8) and 217, arguing that the assessees aimed to evade interest through nominal additional income disclosure.

4. The Revenue argued that the original returns filed beyond the due date made the assessees liable for interest under sections 139(8) and 217, regardless of the revised returns under the Amnesty Scheme. The assessees' intention to avoid interest by disclosing minimal additional income was highlighted.

5. The Tribunal upheld the CIT(Appeals) orders on the maintainability of appeals against charging interest under sections 139(8) and 217. The Tribunal analyzed the intent of the Amnesty Scheme, emphasizing that benefits applied only to concealed income disclosure, not nominal additional income to evade interest.

6. The Tribunal concluded that the benefits under the Amnesty Scheme did not extend to assessees who initially filed returns beyond the due date and later revised them with minimal additional income disclosure. Therefore, interest under sections 139(8) and 217 was rightly charged by the IAC(Assessments), and the CIT(Appeals) erred in deleting such interest. The Revenue's appeals were allowed in part.