9911796707
TMI Blog1999 (3) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... , the income was reduced to Rs. 91,50,470. Interest under s. 217 has been charged in the original assessment at Rs. 24,94,702. The assessee was not allowed credit for TDS of Rs. 1,97,140 on winning of lotteries in the original assessment. The AO in his order under s. 154, dt.21st March, 1988, accepted the claim of the appellant. Credit of TDS for Rs. 1,97,140 was given as per calculation in the computation form in ITNS 150, dt.22nd March, 1988, placed at paper book pp 22 and 23. The AO also adjusted Rs. 8 lakhs from the demands so worked out of Rs. 56,91,155 and the balance payable has been worked out at Rs. 48,91,155. Interest under s. 217 has been charged at Rs. 18,12,623. The AO, however, issued show-cause notice on dt. 5th July, 1989, and pointed out that there has been short charge of interest under s. 217 by an amount of Rs. 3,07,312. A copy of show-cause notice is placed at paper book pp. 24 and 25. Another notice, dt. 26th/29th March, 1990, has also been given. In this notice it was clearly mentioned that the interest under s. 217 was charged after deducting Rs. 8 lakhs from Rs. 56,91,155. This sum of Rs. 8 lakhs should not be deducted. As a result the interest charged unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee as per paper book p. 28 has also not been considered. The order of the learned CIT(A) in upholding the rectification order for creating demand of Rs. 3,07,312 is erroneous and any enhancement made on account of TDS of Rs. 1,97,140 for which credit has not been given for the purpose of charging of interest under s. 217 is beyond the scope of powers vested in him. It was thus contended that the issues were debatable and no rectification could also have been done and as such the order of the authorities below needs to be quashed. The assessee has placed reliance on the following decisions: (1) Vinod Poddar & Anr. vs. CIT (1993) 114 CTR (Pat) 390 : (1994) 208 ITR 722 (Pat); (2) CIT vs. Shri Mahinder Singh (1984) 41 CTR (Del) 345 : (1985) 156 ITR 882 (Del); (3) CIT vs. M.S.J. Engg & Co. (1993) 115 CTR (All) 29 : (1993) 203 ITR 1 (All); (4) CIT vs. Gordhanbhai Jethabhai (1993) 114 CTR (Guj) 196 : (1994) 205 ITR 279 (Guj); (5) Mohd. Kunhi vs. Add. ITO (1967) 66 ITR 250 (Ker); (6) CIT vs. Bangalore Animal Food Corporation (1991) 97 CTR (Kar) 77 : (1932) 194 ITR 242 (Kar); (7) CIT vs. Shapoorji Pallonji Mistry (1962) 44 ITR 891 (SC); (8) CIT vs. Rai Bahadur Hardutt Roy Motilal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missed. 6. In rejoinder the learned authorised representative has replied that different AOs dealing with the same point and coming to different conclusions itself shows that the issue is debatable. The issue for asst. yr. 1985-86 has also been decided in ITA No. 4354/Del/and if the Bench is of the different view the matter can be referred to a larger Bench. However, (sic) income. 7. Rival submissions have been heard. Material on record and precedents relied upon have also been considered carefully. The assessee's contention is that the Tribunal has already decided the issue for asst. yr. 1985-86 in ITA No. 4354/Del/91 does not have any force as the point in dispute in that year was charging of interest under s. 139(8) of the Act where the contention of the assessee was with reference to the decision that interest cannot be charged for less than 30 days. On this point cleavage of judicial opinions existed. It is in that context that the Tribunal has decided the issue for asst. yr. 1985-86 by holding that the matter being debatable, rectification could not have been made. The facts of the case before us are different and as such the contention of the assessee that the issue for as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he head 'income from business' on the principle of equity also it will be unjust not to allow credit on the amount of tax deducted at source as the same is also the amount of tax paid during the previous year It is also well settled that interest is compensatory in character and it is imposed on an assessee who has withheld payment of any tax as and when it is due and payable. Essentially amount of interest under s. 217 is compensatory which has to be charged only to the extent on delay in paying the tax on the due date. In a case where tax at source has been deducted on the income which has been subjected to advance tax, it shall be unjust not to allow any credit of the amount of tax deducted at source and charge interest thereon from the assessee. In such a case if the interest is allowed to be charged that will amount to unjust enrichment of the State. This is not the purpose and intent of the provisions enacted for collection of advance tax. The case of the appellant in its entirety is the same where tax at source has been deducted but no credit is being given for determining the amount of tax payable under s. 209 and the learned CIT(A) has called upon to enhance the charging o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (sic) the Department to make a suo motu adjustment prior to determination of liability on completion of regular assessment or reassessment for all the assessment years or any existing liability falling within that period upto the date of search. However, the Department could act according to the direction of the asseessee in adjusting the seized amount, towards any of the taxes payable by him during the previous year only when the assessee has waived his right to claim the refund of the amount of assets so seized. This has not been done by the assessee. The case laws also referred to by the assessee in respect of point that the issue is debatable are different from the facts and circumstances of the case and no ratio thereof could be applied in the present case before us. We, therefore, do not find any infirmity in the order of the learned CIT(A) in not entertaining the claim of the appellant but in the interest of justice we direct the AO to allow credit of the amount of Rs. 8 lakhs so seized from the date on which regular assessment has been completed in this year. 12. The assessee's claim that interest under s. 132B may be allowed or that at least interest for the period from ..... 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