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TMI Blog1997 (7) TMI 200X X X X Extracts X X X X X X X X Extracts X X X X ..... g 1987-88 21,141 29-6-1989 1988-89 (-) 5,618 31-8-1990 1989-90 99,470 31-3-1990 On 21-7-1988, search operations under section 132 of the Income-tax Act, 1961 ('the Act') were carried out at various business and residential premises of the assessee. In the course of search, various incriminating papers and books of account and valuables were found and seized. In the assessment proceedings explanation was sought from the assessee on various points like sales, purchases, expenses and about various cash credits. It transpires from the assessment orders that the assessee was ready to explain everything in detail and was also willing to produce the parties with whom it had business dealings. However, it appears that, after several rounds of discussion the assessee, through its counsel, agreed to a specified amount of assessment in each year. It is on record that main reason for the assessee to agree to a specified assessment was to put an end to litigation. Accordingly, the assessments for all the three ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In this order dated 27-3-1989, the income determined was ₹ 9,74,057. However, after several set-asides, the income finally assessed was ₹ 1,59,147. 5. Besides the above arbitrariness, Shri Ranka submitted that even at the assessment stage, the assessee was ready to prove the various entries in the books, explain the seized documents and was also ready to produce the various parties with whom the assessee had business dealings or had obtained loans, etc. But as this could have entailed a very long time, on the advice of its income-tax consultant, the assessee made an offer to tax a certain sum in each of the three years, only to buy peace of mind and to put an end to all disputes. 6. Thus, the crux of Shri Ranka's argument was that the circumstances under which the assessee made the offer, were to be appreciated. If the assessee had committed a mistake on account of certain factors, his right to appeal did not vanish. This was more so in the present cases where the offer as made was not accepted but the income was assessed at higher amounts. 7. For the proposition that admission was not always binding where proper reasons existed, the learned counsel relied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which he is assessed; 10. The above provision grants a right of appeal to the assesee, if, and only if, the assessee is aggrieved by an order of the Assessing Officer. Clause (a) postulates either of the following two circumstances whereby the assessee may be aggrieved : (i) where the assessee denies his liability to be assessed under this Act and there is an order against him. (ii) where there is an assessment order under section 143 or 144 and the assessee disputes the quantum of the income, or the tax determined, or the loss computed, or the status under which he is assessed. 11. In the case before us, the assessee is certainly not denying its liability to be taxed under the Act. Hence, the circumstance mentioned at (i) above is not applicable here. Consequently the case laws which deal with the denial of liability and cited before us are not applicable in the present case. The case of the assessee is that it is objecting to the amount of income determined by the Assessing Officer. Thus, the assessee's case clearly falls within the circumstances mentioned at item (ii) above. However, this is not enough. It is yet to be seen whether the assessee can be sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned above in respect of each assessment year, it is evident that the Assessing Officer has assessed exactly the same income as has been offered by the assessee. Further, there is also nothing on record to show that the agreement of the assessee was under any mistaken belief of fact or law. If such would have been the case, then perhaps, the assessee's plea that the agreement is not binding, could have been accepted. There is also nothing on record to snow that the Assessing Officer has either deviated from what was agreed upon or has done anything which can be said to be patently wrong under the law. Once when the assessee agreed upon the amount of income to be assessed for each year, per se its right to appeal is not extinguished. Even in case of agreed assessment the assessee's right to appeal is there, provided, the assessee is able to show as to why the agreement is not binding. In our view, in the present case, the assessee has failed to prove this and, accordingly, the assessee cannot be said to be aggrieved. This is also the sum and substance of the various decisions cited before us. 14. A plea has been raised that entire sales, purchase and other entries i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered opinion, the admission made by the assessee is distinct for and independent of each year and there is no scope for telescoping. 18. Another alternative ground is raised that the lower authorities erred in charging interest under section 139(8) and section 215/217 of the Act. So far as assessment year 1989-90 is concerned, this ground does not arise out of the order appealed against and hence is rejected. 19. For the other two assessment years, it was pleaded by the learned counsel that the Supreme Court has in J.K. Synthetics Ltd. v. CTO [1994] 94 STC 422, held that any provision made in a statute for charging or levying interest on delayed payment of tax must be construed as a substantive law and not adjectival law. Once when a charge or levy is held to be a part of substantive law, it ceases to be automatic. In that event, it was submitted by the learned counsel, interest cannot be levied without issuing a show-cause notice. In the instant case, since no such notice was issued, the levy of interest was bad in law. The learned D.R. submitted that the levy was automatic and hence no notice was required to be issued. 20. Since the learned counsel has put-forth hi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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