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TMI Blog1996 (11) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... t the interest under section 220(2) of the Income-tax Act, 1961, at varied rates as amended from time to time cannot be charged ? 2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the Income-tax Officer cannot pass revision orders under section 154 of the Income-tax Act in this case, revising the orders passed under section 220(2) of the Income-tax Act, earlier 3. Whether, on the facts and ;in the circumstances of the case, the Appellate Tribunal was justified in holding that no valid order under section 220(2) was passed in this case ?" The assessee is a Hindu undivided family represented by the karta, Sri Suresh Gokuldas, after the death of the previous karta, Gokulda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computation of interest at Rs. 68,954. He, therefore, passed an order of rectification under section 154 of the Act after giving the assessee an opportunity of being heard and made a fresh demand of Rs. 96,895 in the place of Rs. 68,954 originally demanded. Aggrieved, the assessee filed an appeal before the Appellate Assistant Commissioner. The Appellate Assistant Commissioner held that the issue was a debatable one and the orders under section 154 for all the years were illegal. According to the Appellate Assistant Commissioner, what at best the Income-tax Officer sought to rectify was a demand under section 156. This could not be regarded as rectification of a mistake apparent from the records in an order passed by the Income-tax Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order passed under sub-section (3) would be subject to the rate so fixed. This was met by the finding by the Tribunal that the settlement reached by the assessee with the Department has to be read as a whole and considering the fact that the assessee had agreed for payment of taxes in respect of the assessment year 1952-53, which is admittedly barred by time, and the further fact that there is no specific mention that interest is to be paid in terms of section 220(2), the Tribunal upheld the orders of the Appellate Assistant Commissioner on this alternative ground also. Learned standing counsel appearing for the Department submitted before us that inasmuch as the assessee failed to complete the instalment payment within the stipulated da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ply because by way of amendment to section 220(2) of the Act, the rate of interest was enhanced to 6 per cent., 9 per cent. and 12 per cent. etc. Learned counsel for the assessee further submitted that the order passed under section 154 of the Act is not sustainable because there is no earlier order in existence so as to enable the Assessing Officer to correct the mistake. According to learned counsel, issuance of notice under section 220(2) of the Act would not amount to an order so as to enable the Assessing Officer to rectify any mistake occurring in the notice. According to learned counsel, since no reference would lie against an order passed under section 154 of the Act, there is no need to make any decision with regard to questions No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . This was directed to be paid within 3.5 days of the receipt of demand notice enclosed along with order passed under section 154 of the Act. It remains to be seen that notice issued under section 156 cannot be considered to be an order so as to enable the Assessing Officer to correct any mistake occurring in the said notice. If at all there is any mistake in the original notice issued by the Assessing Officer, it can be corrected by an administrative order. Invoking the provisions of section 154 of the Act would not arise in the present case, inasmuch as there is no original order passed by the Assessing Officer, so as to enable him to correct any mistake which had occurred therein. Therefore, the order passed by the Income-tax Officer und ..... X X X X Extracts X X X X X X X X Extracts X X X X
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