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TMI Blog2004 (8) TMI 332X X X X Extracts X X X X X X X X Extracts X X X X ..... ve Sri R.K. Panda, FCA has filed a note of arguments regarding the issues raised in the appeal and furnished certain citations in support of the assessee's contentions raised as per the grounds taken before us. Before going to the arguments and counter-arguments, placed by both the sides, it will be proper on our part to examine the facts involved in this case. After hearing both the sides and perusing the records available with us, the facts in brief pertaining to the case are as follows. 4. Late Smt. Eswarama Mitra was the proprietress of one business concern in the name and style of "Orissa Agents" and she was assessed to income-tax under ITO, Central Circle, Cuttack under GIR No. 701-M/C. She continued the business activities from 1st April, 1959 to 5th Aug., 1963 for a short period and during that period relevant to the asst. yrs. 1960-61 to 1964-65 a demand of Rs. 9,25,905 was raised against her by the IT Department. On her failure to pay the tax dues, her properties were attached by the IT Department. Her properties included 9.7 acres of and at Chahata Ghat, Tulsipur. Even recovery proceedings were also initiated against the assessee and as the TRO could not sell the lande ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been contemplated under the provision of the aforesaid section. 8. The AO, as is evident from the order, has levied capital gains tax on the entire sale proceeds. At the same time, he has taken the cost of the land as on 1st April, 1964 shown in the balance sheet filed for the asst. yr. 1964-65 as on 31st March, 1964. He has further deducted pondage charge credited to the Government account and the cost and expenses. That apart, he has also allowed deduction under s. 80-T as per law and has computed the capital gains tax. He has, at the same time, charged interest under ss. 139(8) and 217 of the Act, as mentioned in the assessment order. However, interest charged under s. 217 has been deleted by the CIT(A) and that is not the point of dispute before us. 9. In the above background of the case, the learned counsel challenged the levy of capital gains tax as well as interest charged under s. 139(8). On both these points, the CIT(A) has confirmed the order of the AO. 10. The learned Departmental Representative, while defending the case, has strongly supported the order of the CIT(A) because, according to him, due to non-furnishing of particulars by the legal heirs of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the learned Authorised Representative going through the available material placed on record and the case law along with the provision of law, we find serious infirmities have been caused in this impugned case. Although the TRO has proceeded with the recovery proceeding by way of sale of the land, as is evident from the contentions raised by learned Departmental Representative during the proceeding of hearing of this case, it transpires that necessary permission has been sought from the competent authority with regard to the reopening of the assessment proceedings but as it is apparent from the record, the assessee or her legal heirs has not been involved in the auction proceeding properly. Of course, in all fairness, the assessee or her legal heirs could have agitated this issue before some Civil Court as it is a matter of administrative improprieties. 14. After going through the cited case law reported in the case of CIT vs. J. Narayana Murthy (1998) 145 CTR (AP) 186 : (1997) 228 ITR 99 (AP), we are of the considered view that the Hon'ble Andhra Pradesh High Court has taken the view in the impugned case that in case of insolvency on the passing of order of adjudication by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der to arrive at the rate of computation of indexed cost as on 1st April, 1981. We think that this will meet the ends of justice so far as the grievance of the assessee relating to capital gains is concerned. However, since it is an old matter, both the sides are hereby directed to co-operate with each other and take the initiative at their end so as to complete the reassessment preferably within a period of six months from the date of receipt of this order at their end. 16. In regard to the issue of charging interest under s. 139(8) is concerned, the learned Authorised Representative relied on the following case laws which are dealt in seriatim: (a) No interest under ss. 139 and 217 was leviable in respect of an assessment under s. 147-CIT vs. Charles D'Souza (1990) 186 ITR (St.) 28. The SLP filed by the Revenue was dismissed by the Hon'ble Supreme Court. (b) Interest under s. 139(8) could not be levied in proceedings under s. 147(a) of the Act-B. Babu Co. vs. ITO (1987) 60 CTR (Kar) 33 : (1987) 163 ITR 654 (Kar); (c) Where an assessment is made under s. 143(3)/147, interest cannot be charged under ss. 139(8) and 217-CIT vs. Padma Timber Depot (1988) 67 CTR (AP) 109: (19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question of charging of interest under s. 139(8) is concerned, we find that there were plethora of judgments of Hon'ble Supreme Court and various High Courts that in the case of reassessment, interest under s. 139(8) could not be charged. It was also held in the case of Smt. Sushma Saxena and some other cases referred to above, that interest could not be charged under s. 139(8) in case of reassessment for asst. yrs. 1983-84 and 1984-85. 18. The learned Authorised Representative of the assessee has also stated in the written submission that as a result of the substitution of a new Expln. 2 to s. 139(8)(a) by the Taxation Laws (Amendment) Act, 1984, interest can be charged under s. 139(8) even where an assessment is made for the first time under s. 147. Since the Explanation is effective from the asst. yr. 1985-86, it does not apply to the preceding assessment year i.e., asst. yr. 1984-85. 19. The facts and circumstances of the present case being identical to the facts of the cases referred to by the learned Authorised Representative and the assessment year concerned in the present case being 1984-85, we hold that the present case is fully covered by the aforesaid decisions. Resp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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