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TMI Blog1999 (11) TMI 894X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome-tax (Appeals) following the decision given by this court in the case of Charles D Souza v. CIT [1984] 147 ITR 694 . In the appeal preferred before the Tribunal, it was found that there is another decision in the case of ITO v. K. L. Srihari (HUF) [1992] 197 ITR 694 (Kar) and, accordingly, the order passed by the Commissioner of Income-tax (Appeals) was upheld by the Tribunal. This reference was made in the light of the judgment given in CIT v. Sun Engineering Works P. Ltd. [1992] 198 ITR 297 (SC). The argument of learned standing counsel for the Department is heard. Learned counsel for the assessee submitted that the judgment given by the apex court in the case of Sun Engineering Works P. Ltd. [1992] 198 ITR 297, was an altogether different issue and so far as the question of levy of interest in the reassessment proceedings under sections 139(8) and 215 is concerned, the matter was considered by this court in the case of ITO v. K.L. Narayana [1992] 197 ITR 694, wherein following the decision given in the case of CIT v. Mysore Iron and Steel Ltd. [1986] 157 ITR 531 (Kar), it was observed that the effect of reopening an assessment is that the original assessment gets totall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat in the meantime there was an appeal and in pursuance of an appeal order dated January 31, 1986, the liability of tax was determined vide order dated February 13, 1986. The reassessment was framed on July 17, 1987, in which the interest of fixed deposit of ₹ 14,589 which was not included in the income earlier was offered by the assessee and, therefore, the proceedings under section 147 were initiated. It is submitted that under section 147 there is no liability of interest. In this regard various judgments have been relied on for the point that at the relevant time there was no liability under section 147 for interest. The Rajasthan High Court in CIT v. Mannalal Nirmal Kumar [1992] 198 ITR 556 ; CIT v. Padma Kumari Surana (Smt.) [1994] 207 ITR 155 (Raj) ; Gopi Ram Lila v. CIT [1997] 129 CTR 387 (Raj) ; CIT v. Kapoor Chand Ram Chand [1995] 216 ITR 318 (Raj) and CIT v. Multimetals Ltd. [1991] 187 ITR 98 (Raj), Charles D Souza v. CIT [1984] 147 ITR 694 (Kar)-SLP dismissed by the Supreme Court [1990] 186 ITR (St.) 28, B. Babu and Co. v. Sixth ITO [1987] 163 ITR 654 (Kar), CIT v. Padma Timber Depot. [1988] 169 ITR 646, 660 (AP) ; Prakash Lal Khandelwal v. ITO [1989] 180 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar), it was observed that the interest can be levied only in the case of regular assessment, i.e., the assessment made under section 143 or 144 and it will not include the assessment or reassessment made under section 147. So far as this provision of law is concerned the liability of interest under the proceedings under section 147 will not arise. But that would be only in respect of the income determined in the proceedings under section 147. In ITO v. K. L. Srihari (HUF) [1992] 197 ITR 694 (Kar), the question was that the interest was not levied under sections 139(8) and 215 in the original assessment order. In the present case, the interest was not levied but was directed to be levied. There was further observation that the original assessment gets totally effaced if such assessment is reopened. In the case of CIT v. Sun Engineering Works P. Ltd. [1992] 198 ITR 297 (SC), it was observed that the order made in relation to the escaped turnover does not affect the operative portion of the order particularly if it has acquired finality and the original order retains both its character and identity. In other words, it was considered that the reassessment proceedings cannot be to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt has to be refunded under section 240 and with interest, if any, under section 244. The refund amount is not treated any more in the Act as a portion of the advance tax paid by the assessee. What is refunded pursuant to an appellate order is a portion of what was treated and dealt with as payment of income-tax by the assessee. Its character is in no way different from the tax paid pursuant to notice of demand under section 156 by an assessee. Any tax refundable pursuant to the appellate order has to be dealt with in accordance with the provisions of sections 240 and 244. There is no scope for invoking the provisions of section 214 in such a situation. In this case the word regular assessment as used in section 214 was interpreted to mean the assessment under section 143/144 of the Income- tax Act. It was observed that the amount on which interest is to be paid is the amount of advance tax payable in excess of the tax payable as calculated in the regular assessment (first assessment), the amount on which the interest was payable does not vary due to the reduction or enhancement of tax as a result of any subsequent proceedings. The matter was again considered in CIT v. Ama ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y consequences flowing therefrom would obliterate the liability of the assessee. The assessment is a term which includes computation and determination of the income and tax due thereon. Under the Income-tax Act, the procedure is given for assessment by which the income is determined. There is an application of mind in determining the income and computation of tax liability. If the income is once determined, there may be rectification of a particular item of income but that will be limited to that item itself and the entire assessment is not affected. In reassessment also there can be circumstances where the total income is recomputed again and in that case the original assessment order is effaced. But in a case where there is no determination of the income in reassessment proceedings of the figure which has already been assessed and has only been added to the income determined in reassessment proceedings it cannot be considered that the said income is reassessed. There may be a number of contentions which can be raised against the assessed income or have already been raised and have become final in appeal, revision, reference, etc. In reassessment proceedings on the income fr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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