2001 (9) TMI 267 - AT - Income Tax

Summary

Issues:
The judgment addresses the issue of charging interest u/s 158BFA(1) and the restoration of the matter back to the AO for fresh consideration.

Charging of Interest u/s 158BFA(1):
The case involved a search and seizure operation resulting in the issuance of a notice u/s 158BC for the assessee to produce undisclosed income. The delay in filing the block return was due to the AO's failure to provide seized document copies and the death of the assessee. The CIT(A) referred to a similar case where the delay was condoned due to factors beyond the assessee's control. The CIT(A) directed the matter back to the AO to scrutinize the supply of document copies and determine if the delay was attributable to the assessee. The Tribunal upheld the CIT(A)'s decision, emphasizing that if the delay was not the assessee's fault, charging interest under s. 158BFA would not be mandatory.

AO's Scrutiny and Decision:
The CIT(A) highlighted that the assessee received document copies on a later date, allowing time for filing the block return. Deposits were made against potential demands. The matter was referred back to the AO to assess the document supply process and determine if the delay was the assessee's responsibility. The Tribunal agreed with the CIT(A) that penalizing the assessee for delays beyond their control was unjust. The AO was instructed to investigate the delay's attribution before deciding on interest charges u/s 158BFA.

Conclusion:
The Tribunal dismissed the Departmental appeal, supporting the CIT(A)'s decision to consider the circumstances leading to the delay in filing the block return before mandating interest charges u/s 158BFA. The judgment emphasized that penalizing the assessee for delays caused by external factors was not justifiable, and interest charges should be imposed only if the delay was within the assessee's control.