1989 (1) TMI 161 - AT - Income Tax

Summary

Issues:
1. Jurisdiction of the Commissioner under section 263 of the Income Tax Act, 1961 for review of an assessment made under section 147(a).
2. Non-charging of interest under sections 139(8) and 217 by the assessing officer and its impact on the assessment.
3. Whether the Commissioner had lawful assumption of jurisdiction under section 263.

Analysis:

Issue 1: Jurisdiction of the Commissioner under section 263
The appeal was against the order of the CIT (Administration) Uttar Pradesh under section 263 of the Income Tax Act, 1961, for the assessment year 1975-76. The Commissioner contended that despite the assessment being made under section 143(3) read with section 147, it was the first assessment for the year as the assessee had not submitted a return under section 139(1). The Commissioner held that this was not a case of re-assessment and thus, he was not debarred under section 263 from reviewing such an assessment. The Commissioner directed the assessing officer to charge interest under sections 139(8) and 217, citing authorities to support his view.

Issue 2: Non-charging of interest under sections 139(8) and 217
The Commissioner found that the assessing officer had not charged interest under sections 139(8) and 217 and had not indicated any reason for this omission. The Commissioner held that this non-charging of interest was erroneous and prejudicial to the interest of Revenue. The Commissioner cited legal precedents to support his view that charging of interest under section 139(8) was part of the assessment process. The Commissioner directed the assessing officer to verify the chargeability of interest under these sections.

Issue 3: Lawful assumption of jurisdiction by the Commissioner
The Tribunal considered whether the Commissioner had lawful jurisdiction under section 263 to review the assessment made by the assessing officer. The Tribunal noted that the assessing officer's order was open for revision or review by the Commissioner. It was observed that the assessing officer had not shown a deliberated application of mind regarding the levy of interest under sections 139(8) and 217. The Tribunal held that the Commissioner had jurisdictional facts to assume lawful jurisdiction and upheld the Commissioner's order. The Tribunal confirmed the directions given by the Commissioner to charge interest under the relevant sections if found to be leviable as per law.

In conclusion, the Tribunal dismissed the appeal of the assessee and confirmed the order of the Commissioner under section 263 of the Income Tax Act, 1961.