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TMI Blog2001 (8) TMI 289X X X X Extracts X X X X X X X X Extracts X X X X ..... he firm, M/s. Meera Industries, of which the assessees concerned in all these appeals, as noted above, are partners, approached the Settlement Commission with an application under section 245C on 25-5-1984, and the Settlement Commission disposed of the same by its order under section 245D(1) dated 3-6-1992. After determining the income of the assessee-firm, M/s. Meera Industries, the Commission had allocated the total income of the firm after firm's tax, among the partners under section 158, which for the assessment year 1984-85 read as under : 'ALLOCATION ------------------------------------------------------------------------- Sl Name of partner %of Share of Interest Total No. share Profit ------------------------------------------------------------------------- 1. Geetha M. Desai 15% 58,869 22,243 81,112 2. Satish Modi HUF 25% 98,117 719 98,836 3. Kantilal B. Desai HUF 10% 39,247 13,225 52,472 4. Satish Modi Ind. 25% 98,117 13,028 1,11,145 5. Sudha B. Desai 10% 39,247 4,201 43,448 6. Subodh Desai HUF 5% 19,623 3,475 23,098 7. Valmik Desai HUF 5% 19,623 3,442 23,065 8. Vinod Desai HUF 5% 19,623 3,430 23,053 ---------------------------------- 3,92,466 63,763 4,56 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , M/s. Meera Industries, and it has no direct bearing at all on the individual partners of the said firm. So, it was held that it was only the firm M/s. Meera Industries, which was liable to pay interest under section 245D(6A) and the partners could not be made liable to pay interest under that section. He also observed that the issue, at any rate, is controversial and so, the orders of the Assessing Officer under section 154 rectifying the earlier orders under section 155, were invalid. The CIT(A) thus deleted the interest charged under section 245D(6A) in the cases of Shri Satishchandra Modi (HUF) and Shri Satishchandru Modi (Ind.). Aggrieved by the action of the CIT(A) in these matters, the Revenue preferred appeals. ITA Nos. 1533 to 1536 H/96, before this Tribunal. 5. While the matter was decided in favour of the assessees by the CIT(A) in the cases of the two assessees before him, a contrary fate awaited the cases of other set of partners, whose appeals went before the Dy. Commissioner (Appeals). The Dy. Commissioner (Appeals) referred to the order of the CIT(A), but preferred to take a contrary view in the matter. Her observations in the 'Case of one of the partners, viz, Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 before this Tribunal. 6. Before us, the learned Departmental Representative supported the orders of the Assessing Officer passed under section 154, in all these cases. His contention is that a firm is only a compendium name of its partners, and the partners do not have any separate existence. The order under section 245D(4) passed in the case of the firm M/s. Meera Industries, according to the learned Departmental Representative, holds good and is equally binding on the partners so far as their share incomes are concerned. So, he submitted that the partners are also liable to pay interest under section 245D(6A) just as the firm is liable. It is also mentioned that the concerned partners have not disputed the order under section 245D(4) and the distribution of share income among the partners in terms of section 155 therein. So, there is no reason for them to dispute the charging of interest under section 245D(6A), which is only consequential, according to him. It is also mentioned that in its application before the Settlement Commission, the firm M/s. Meera Industries, made the following prayer - 'the Hon'ble Commission would be pleased, not to impose any penalty or any other li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the Settlement Commission is because of the specific provisions of section 155. The fact that the order of the Settlement Commission under section 245D(4) was followed by changes in the share incomes of the individual partners does not in any way lead to the conclusion that the provisions of section 245D(6A) are also applicable to the partners. There is no statutory warrant for this inference. The provisions of section 245D(6A) read as under - '245D .............. (6A) Where any tax payable in pursuance of an order under sub-section (4) is not paid by the assessee within thirty-five days of the receipt of a copy of the order by him, then, whether or not the Settlement Commission has extended the time for payment of such tax or has allowed payment thereof by instalments, the assessee shall be liable to pay simple interest at fifteen per cent per annum on the amount remaining unpaid from the date of expiry of the period of thirty-five days aforesaid. (7) ............... It may be observed that the provision comes into picture when the tax payable in terms of and in pursuance of an order under section 245 is not paid by the assessee within 35 days of the receipt of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amendment of an assessment of the partner consequent to an order under section 245D passed by the Settlement Commission on an application of the firm, is specifically provided in clause (c) of section 155(1). It is this statutory authority that extends the scope of the order under section 245D(4) in the case of a firm to its partners, by way of revision of their share incomes. No such provision is made to extend the scope of the provisions of section 245D(6A) to the partners of the firm, which approached the Settlement Commission with an application. 10. In the light of the foregoing discussion, we are of the view that the order of the CIT(A) dated 14-5-1996 impugned in ITA Nos. 1533 to 1536/ Hyd/96, lays down the correct position of law. At any rate, the issue is controversial and beyond the scope of the provisions of section 154, again, as held by the CIT(A) in that order. We accordingly uphold the orders of the CIT(A) and reject the contentions of the Revenue in those appeals. 11. In view of the above, the orders of the Dy. CIT(A) dated 23-12-1996 impugned in all other appeals are liable to be set aside. We accordingly set aside the same and delete the amounts of interest cha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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