1984 (8) TMI 143 - AT - Income Tax

Summary

Issues:
1. Whether interest charged under section 139(8) and section 217 can be deleted in the absence of a specific order in the assessment order itself.
2. Whether interest can be charged under sections 139 and 217 in reassessment proceedings.

Detailed Analysis:
1. The appeals before the Appellate Tribunal ITAT Jaipur pertained to the assessment years 1976-77, 1978-79, 1979-80, and 1980-81. The primary issue was the deletion of interest charged under section 139(8) and section 217 without a specific direction in the assessment order. The ITO had not explicitly directed the charging of interest under these sections in the assessment order. The assessee contended that interest should not be charged automatically and that the ITO must apply his mind to the facts of the case. The AAC accepted these contentions and deleted the levy of interest. The Departmental Representative argued that the signed ITNS 150 form could be treated as an order of the ITO to charge interest, even without explicit mention in the assessment order. However, the Tribunal held that interest cannot be charged unless specifically ordered in the assessment itself, following precedents from J & K High Court and Calcutta High Court.

2. Another issue raised was whether interest could be charged under sections 139 and 217 in reassessment proceedings. The Departmental Representative relied on a Karnataka High Court ruling to support the proposition that interest need not be charged in the assessment order but can be charged separately after assessment. However, the Tribunal referred to a Calcutta High Court ruling, stating that interest cannot be levied under section 217 in reassessment proceedings. The Tribunal upheld this objection raised by the AAC, concluding that interest could not be charged in reassessment proceedings. The Tribunal also noted that a regular assessment for the purpose of section 217 does not include reassessment under section 147.

In conclusion, the Appellate Tribunal ITAT Jaipur dismissed all the appeals, holding that interest cannot be charged without a specific order in the assessment order itself and that interest cannot be levied in reassessment proceedings. The Tribunal relied on various precedents to support its decision and emphasized the importance of a clear directive in the assessment order for charging interest under the relevant sections.