9911796707
TMI Blog2001 (6) TMI 189X X X X Extracts X X X X X X X X Extracts X X X X ..... . 2. Briefly stated, the facts of the case are that for the assessment year 1987-88 the assessee originally filed the return of income on 9-2-1988 admitting income of Rs. 13,880. The assessment was completed under section 143(1) accepting the return. Thereafter a survey under section 133A was conducted by the AD (1) in the business premises of the assessee on 18-12-1990. During the course of the survey the assessee's husband had admitted that the assessee used to charge interest on pawn inams at 27 per cent per annum and she used to account for interest at 12 per cent per annum. The income that had been earned and kept outside the books of account had been invested in various securities and also utilised for meeting the household expenses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Thereafter, in the light of the survey conducted by the department and in pursuance of the statement given by her husband, the appellant offered Rs. 1,25,000 each for five assessment years from 1987-88 to 1991-92. The appellant voluntarily filed returns admitting Rs. 1,25,000 as additional income and the Assessing Officer issued notices under section 148 just to legitimise those returns. The disputed levy of interest under sections 139(8) and 217 is part of the reassessments. The appellant totally denies the liability. In my view the appellant is bound to succeed since it has been held that interest under sections 139(8) and 217 can not be levied in a reassessment vide Karnataka High Court's decision in Charles D'Souza's case reported in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 143(1)(a). At the time of hearing the learned departmental representative contended that the decision of the Karnataka High Court in Charles D'Souza v. CIT [1984] 147 ITR 694, relied upon by the first appellate authority is no more good law in view of the amendments made to sections 139(8) and 215(3) of the Income-tax Act with effect from 1-4-1985. Specifically he drew our attention to the Explanation 2 to section 139(8), which reads as under : 'Where, in relation to an assessment year, an assessment is made for the first time under section 147, the assessment so made shall be regarded as a regular assessment for the purpose of this sub-section.' Also section 215(3) was relied upon by the learned departmental representative. 5. On t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he returns were filed only after the survey. The original return and the revised return were different and not one and the same, The learned departmental representative also relied on the Kerala High Court decision in the case of Mrs. Lally Jacob v. ITO [1992] 197 ITR 439 (FB) and also the same High Court decision in the case of Thekkanatu Firms v. CIT [1993] 202 ITR 389. 7. We have heard the rival submissions and considered the facts and the materials on record including the decisions relied upon. The undisputed fact is that the originally returned incomes of the assessee were accepted under section 143(1)(a) and later on as a result of survey under section 133A the assessee had voluntarily filed revised returns which were regularised by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice under section 148 can be issued in three different situations where income has escaped assessment. It can be issued for making the assessment under section 147, for making reassessment or for making recomputation of income. However, in section 215(6) and in Explanation 2 to section 139(8) it has been specifically confined to only one of those situations contemplated in section 148. Section 215(6) as well as Explanation 2 to section 139(8) provides that where in relation to an assessment year an assessment is made for the first time under section 147, the assessment so made shall be regarded as regular assessment for the purpose of sections 139(8),215 and 217, etc. These provisions, which have been inserted with effect from 1-4-1985, do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oceedings by way of appeals, revisions, rectifications, reassessments, etc. However, these provisions do not authorise the levy of interest under section 139(8) or 217 for the first time where no such interest was charged in the original assessment made for that particular year. This view of ours is fortified by the decision of the Ahemdabad Bench-C of the Tribunal in the case of Asstt. CIT v. Harikrishna Family Trust [1996] 57 ITD 353. 8.2 In view of the totality of the facts and the circumstances of the case in the light of the above discussion we are inclined to hold that interest under sections 139(8) and 217 levied by the Assessing Officer on making assessments under section 143, read with section 147 are to be deleted. Thus the order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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