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TMI Blog1994 (11) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn for the year 1973-74. An assessment was completed on the basis of this return under section 143(3) on March 31, 1976, on a total income of Rs. 1,14,000. This was reduced in appeal to Rs. 1,03,230. The appellant had made a disclosure under the Voluntary Disclosure Scheme of the Income and Wealth Ordinance, 1975. In determining the amount of tax payable under the assessment, the amount of tax paid under this scheme was given credit. In the original assessment made on March 31, 1976, a copy of which is exhibit P-1, the Income-tax Officer did not levy any interest either under section 139(8) or 217. The assessment was reopened under section 147(a) to bring to tax an amount of Rs. 82,376 claimed as sales tax liability. The reassessment w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncerned, the Commissioner held that the levy of such interest in reassessment proceedings even if it was restricted to the tax determined in the original regular assessment cannot be upheld. He disposed of the revision petition accordingly confirming the levy of interest under section 139(8) and cancelling the levy under section 217. A copy of this order is exhibit P-7. The appellant challenged this order by filing the writ petition which was dismissed by the learned single judge (see [1993] 202 ITR 389 (Ker)). The appeal is filed therefrom, the challenge being to the levy of interest under section 139(8) along with the reassessment order, exhibit P-2. We must note even in the first instance that the interest is not levied on the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7, the assessment proceedings start afresh and the proceedings for assessment for that year will be pending and will continue until a final order is rendered. When the assessment is reopened, section 143(3) is attracted, bringing in its trail section 144B as well if the intended addition to the returned income is more than Rs. 1,00,000. The submission was that the reassessment being under section 143, it was a regular assessment under section 2(40), in the course of which interest under section 139(8) could be levied. We shall now refer to the decisions referred on the assessee's side. But before doing so, we may mention that the Full Bench of this court which dealt with the question as to what is a regular assessment in Lally Jacob v. IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings under section 148 as well. The decision on which considerable reliance was made by Sri P. Balachandran for the appellant was that of the Karnataka High Court in Charles D'Souza v. CIT [1984] 147 ITR 694, where the court held, inter alia, that a regular assessment as defined in section 2(40) means an assessment made under section 143 or 144 in contradistinction to an assessment/reassessment made under section 147. It was accordingly held that interest under sections 139(8) and 217 cannot be levied in the case of a reassessment under section 147. It must be noted that the interest with which the court was concerned in that decision was one levied on the amount computed as the tax payable on reassessment and it was in that context ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s face, speak of the period of time at which the levy should be made, whether it should be in the regular assessment itself or whether it could be in subsequent proceedings. When the reference to regular assessment is only for the purpose of quantifying the interest and pegging it down to the tax determined on regular assessment, we do not find any reason why we should further peg down the levy itself to the date of the regular assessment foreclosing its levy on a subsequent date. The Commissioner in his revisional order, exhibit P-7, has taken the view that the only injunction contained in section 139(8) is that the interest is to be levied with reference to the tax determined on regular assessment and, therefore, the reduced interest levi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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