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TMI Blog2014 (9) TMI 490X X X X Extracts X X X X X X X X Extracts X X X X ..... t was submitted that the proceedings dated 26-06-1994 was further revised on 14-08-2003 to adopt the correct share income from a partnership firm where the assessee was a partner resulting in refund of Rs. 8,90,706/-. Subsequently, the Assessing officer issued notice u/s. 154 of the I.T. Act on 09-06-2005 purporting to rectify mistake in the proceedings dated 14-08-2003 on the plea that these were an omission to charge interest u/s. 220(2) of the I.T. Act which constituted a mistake apparent on the face of the record. Further, there is levy of interest u/s. 245D(6A) and withdrawal of interest u/s. 244(1A) of the I.T. Act. 3. On appeal, the CIT(A) observed that the Assessing officer has passed an order u/s. 143(3) r.w.s. 250 on 22-03-1991 as a result of which a sum of Rs. 58,23,404/- was demanded from the assessee. The CIT(A) further noticed that the Assessing officer has passed the order dated 27-09-2006 passed subsequent to the order dated 18-07-2006 against which this appeal was filed rectifying the mistake and was charged interest u/s. 220(2) of the I.T. act from the date of completion of reassessment i.e., 22-03-1991. The assessee was required to pay balance tax by 02-05-1991 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relied on the decision of the Constitution Bench in the case of Brij Lal vs. CIT reported in 328 ITR 477 (SC). b) The fact that the demand raised by the assessment order is not valid has been admitted by the Department in the proceedings dated 23-08- 1983 giving effect to the Settlement Commission' order. It has been stated in the proceedings dated 23/08/1993 as follows: "The demand of Rs. 5723404/- outstanding as per the assessment order u/s. 143(3) dated 22-03-1991 as this assessment is no more valid in law". c) Interest has already been levied u/s. 245D(2C) and u/s. 245D(6A) for the delay in the payment of the tax determined on the total income for the assessment year 1985-86 and any further levy of interest u/s. 220(2) will result in a double levy of interest. d) The assessment made by the Settlement Commission u/s. 245D(4) is after taking into consideration the income returned and the income disclosed. There is no place for the assessed income u/s. 143(3). Section 245D(4) assessment is a comprehensive assessment done afresh. There is no question of this assessment u/s. 245D(4) relating back to the date of regular assessment u/s. 143(3)/144/147 of the Income Tax Act. e) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kart Bros. (82 ITR 50 (SC) Dinosaur Steels Ltd. vs. JCIT (349 ITR 360) (SC). 10. On the other hand, the Ld. DR submitted that in view of the specific provisions of sec. 220(2) of the I.T. Act, the Assessing officer is justified in charging interest. A reading of the provisions of section 220(1) and 220(2) along with 245D(6A) makes it clear that levy of these interests are statutorily enforceable. Non-levy of these dues are mistakes apparent from the records to be revised u/s. 154. 11. The Ld. DR relied on the following case laws which have decided that "overlooking mandatory provisions of law is a mistake which can be rectified": 1. Addl. CIT vs. India Tin Inds. (P) (Ltd.) (166 ITR 454) (Kar.) 2. ITO vs. Ashok Textiles Ltd. (411 ITR 732) (SC) 3. CIT vs. Pierce Leslie & Co. Limited 227 ITR 759 (Madras) 12. The Ld. DR also placed reliance on the decision of the Hon'ble Madras High Court in the case of J.Jayalalitha vs. CIT & others (244 ITR 74) wherein it was held that "Accrual of interest u/s. 220(2) is automatic. No opportunity to be given before levy". 13. The Ld. DR also relied on the following judgments wherein it was held that "220(2) interest is to be charged from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e heard both sides in detail. Even though this appeal arises out of the order passed by CIT(Appeals) in a proceeding concluded by the Assessing officer u/s. 154, the pith and substance of the assessment was in fact determined by the Settlement Commission. All subsequent proceedings initiated by the Assessing officer were the fall out of the order passed by the Settlement Commission. As such this Tribunal cannot examine any involving the matters subjected to the assessment. When this Tribunal has no say on the subject matter of the assessment, the Tribunal cannot be called upon to examine the fall out orders passed by the Assessing officer. Therefore, in the facts and circumstances of the case, we dismiss the appeal filed by the assessee as not maintainable before the Tribunal." . 20. Against the order of the Tribunal, the assessee filed an appeal before the Hon'ble High Court. The Hon'ble High Court, while adjudicating the issue, observed that the Tribunal ought to have decided the appeal on merits after entertaining the same. Accordingly, the High Court set aside the order of the Tribunal and remitted the issue back to the file of the Tribunal to dispose of the matter on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Settlement Commission and the Settlement Commission in this case passed the order on 29-06-1993 under section 245D(4) of the Act for which an application was filed by the assessee before the Settlement Commission on 28/08/1989. At that time, the assessment was not completed and the impugned assessment was completed only on 22-03-1991 which is a reassessment. 22. Being so, the issue dealt by the Assessing officer in the rectification order u/s. 154 of the Act cannot be said to be a mistake apparent from record since the said view has been arrived at by the Assessing officer on an earlier occasion after due application of mind to the facts and circumstances of the case and the relevant material on record. 23. Further, it is well settled that a mistake apparent from record must be an obvious and patent mistake and not something which can be established by a long-drawn process of reasoning on points on which there may be conceivably two opinions. In the present case, the issue dealt by the Assessing officer is based on the reasoning on points on which there may be two views, and it cannot be taken up by the Assessing officer vide proceedings u/s. 154 of the Act. In our opinion, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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