1993 (2) TMI 160 - AT - Income Tax

Summary

Issues:
1. Inclusion of term deposit in income by Assessing Officer
2. Objection to inclusion of term deposit in income
3. Levy of interest under sections 139(8), 217, and 220
4. Charging of interest under section 139(8) and section 217 for the same period

Analysis:
1. The appeal challenged the inclusion of a term deposit of Rs. 39,300 by the Assessing Officer in the income of the assessee. The Assessing Officer included this amount in the income of the assessee while giving effect to the appellate order, leading to the appeal against this decision.

2. The learned DC (A) held that the assessee could not object to the inclusion of the term deposit as no objection was raised initially. The DC (A) relied on a previous court decision to support this stance, stating that objections should have been raised in the original appeal.

3. The assessee contended that the inclusion of the term deposit was a mere change of opinion and should be struck down. The interest charged was also disputed, arguing that it was not correctly computed due to no default on the part of the assessee. The Department supported the DC (A)'s order.

4. The ITAT member disagreed with the DC (A)'s decision, highlighting a crucial difference in the case law cited. The ITAT member noted that the assessee had raised objections after the income was subsequently included, unlike the case cited by the DC (A). The issue was remanded to the DC (A) for fresh consideration.

5. Regarding the levy of interest under sections 139(8), 217, and 220, the ITAT member rejected the objection raised by the assessee concerning excessive interest under section 220(2). The member explained that there was no provision in section 246 to entertain such objections, directing the assessee to seek relief under section 220(2A) from prescribed authorities.

6. The ITAT member found that charging interest under section 217 and section 139(8) for the same period was unjustified. Referring to a Supreme Court decision, it was clarified that if advance tax covers the entire amount of tax assessed, no interest is chargeable. Therefore, the charging of interest under section 139(8) was canceled, while the charging of interest under section 217 was confirmed.

7. In conclusion, the appeal was partly allowed, with the ITAT member providing detailed reasoning for each issue raised by the assessee and the Department.