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TMI Blog1993 (2) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... o void ; (B) (To) quash the levy of interest under section 215 and under section 217 of the Income-tax Act, 1961, levied by respondent No. 1, in the order of assessment dated September 25, 1985, as per annexure 'D' for the assessment year 1980-81 to the tune of Rs. 41,898 as being unauthorised and opposed to the judgment of this Hon'ble court in the case of Charles D'Souza v. CIT [1984] 147 ITR 694 by issue of a writ of certiorari or any other appropriate writ or order or direction, as the case may be ; (C) (To) issue writ of mandamus or any other appropriate writ or order or direction, as the case may be, directing the respondents to refund a sum of Rs. 41,898 being the tax collected illegally by way of interest under sections 215 and 217 of the Income-tax Act, 1961. " The learned single judge has held that the appellant/petitioner can raise objections before the learned Magistrate and, therefore, it is not necessary to entertain the writ petition. Sri Chander Kumar, learned counsel appearing for the appellant/ petitioner, has advanced the following contentions : That the assessment in question relates to the assessment year 1980-81, that the last date for filing the ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his decision has not been considered in Charles D'Souza v. CIT [1984] 147 ITR 694 (Kar), therefore, the decision in Central Provinces Manganese Ore Co. Ltd. v. CIT [1986] 160 ITR 961 (SC) governs the case. In the light of these contentions, the points that arise for consideration are as follows: "(1) Whether, in the facts and circumstances of the case, the penal interest levied under section 139(8) of the Act and the interest levied under section 215 of the Act are tenable ? and (2) Whether the prosecution launched in C. C. No. 97 of 1992 on the file of the First Additional Chief judicial Magistrate, Mangalore, is maintainable ? " Point No. 1: We have already stated the necessary facts. The penal interest under section 139(8) of the Act has been levied in a sum of Rs. 17,998 and the interest under section 215 of the Act has been levied to the tune of Rs. 22,900. The assessment cannot at all be considered to be a regular assessment because it has been made under section 147 of the Act. Assessments made under section 147 of the Act prior to April 1, 1985, did not attract the provisions contained in sub-section (8) of section 139 of the Act.This has been clearly held by a Divi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 139(8) and section 217 of the Act is leviable in a case of an assessment or reassessment made under section 147 of the Income-tax Act, 1961 '. " This decision was affirmed by the Supreme Court in S. L. P. (Civil) No. 8215 of 1985, which reads thus : "Interest : Whether leviable on reassessment: 10-9-1990: Their Lordships, M. N. VENKATACHALIAH and N. M. KASLIWAL JJ., dismissed the Department's special leave petition against the judgment dated January 27, 1984, of the Karnataka High Court in I. T. R. C. No. 36 of 1980, reported in 147 ITR 694, whereby the High Court answered against the Department the question whether interest under sections 139 and 217 of the Income-tax Act, 1961, was leviable in respect of an assessment under section 147 : CIT v. Charles D'Souza-S. L. P. (Civil) No. 8215 of 1985. " The decision relied upon by learned junior counsel for the Income-tax Department in Indian Telephone Industries Co-operative Society Ltd. v. ITO [1972] 86 ITR 566 (Mys), relates to a case wherein the petitioner applied to the Commissioner of Income-tax, Mysore, to waive the penalty in exercise of his power under section 271(4A) of the Act. In that application, the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eas, such a question was raised in Charles D'Souza's case [1984] 147 ITR 694 (Kar), and the lacuna in the Act was noticed. In fact, the lacuna in the Act was removed pursuant to the decision in Charles D'Souza's case [1984] 147 ITR 694 (Kar), by the Taxation Laws (Amendment) Act, 1984 (for short, " Amendment Act, 1984 " ), with effect from April 1, 1985. Sub-section (8) of section 139 of the Act came to be amended by the new Explanation, which was numbered as Explanation 2. Similarly, sub-section (6) came to be inserted in section 215 of the Act, by the Amendment Act, 1984, with effect from April 1, 1985. Explanation 2 to section 139, as introduced by the Amendment Act, 1984, in section 139(8) of the Act, reads thus : " Explanation 2. - 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 purposes of this sub-section." Similarly, sub-section (6) in section 215 of the Act, as inserted by the very same Amendment Act, 1984, also reads thus : "(6) Where, in relation to an assessment year, an assessment is made for the first time under section 147, the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the authority is in question. Such a contention has also been considered by us in W. A. Nos. 1977 and 1978 of 1992 Smt. S. Mageshwari v. Asst. CIT [1993] 201 ITR 472 (Kar), decided on November 4, 1992. In this connection, we have held as follows (at page 476 ) : "It is a settled position of law that revision is not a right and it cannot at all be equated to the right of appeal, therefore, failure to invoke revisional jurisdiction or avail of the remedy of revision, by itself, would not disentitle a party aggrieved to invoke the jurisdiction of this court under articles 226 and 227 of the Constitution ; nor is such failure a bar to the exercise of jurisdiction under articles 226 and 227 of the Constitution. The delay in approaching this court, in a matter where there is no authority vested in the assessing authority to levy penal interest, by itself, is not a ground to deny relief under articles 226 and 227. No doubt, the assessee has approached this court after a lapse of about two years, but the delay of two years in the facts and circumstances of the case, when the authority has no jurisdiction at all to levy penal interest to the tune of Rs. 3,88,509, would not be a gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yable by him on the total income determined on regular assessment, as reduced by the advance tax, if any, paid, and any tax deducted at source, does not exceed three thousand rupees." We do not consider it necessary to determine any one of the contentions having a bearing on this point as it is open to the appellant to urge the same before the learned Magistrate before whom the criminal case is pending. Accordingly, consideration of the contentions having a bearing on this point is left open. For the reasons stated above, the writ appeal is allowed. The order dated December 12, 1992, passed in Writ Petition No. 29666 of 1992 is set aside. Writ Petition No. 29666 of 1992 is partly allowed. Penal interest levied under section 139(8) of a sum of Rs. 1,35,970 and the interest under section 215 of the Act to the tune of Rs. 22,900 in the assessment order dated September 25, 1985, for the assessment year 1980-81 are quashed. The order of assessment in respect of other matters is not disturbed. If the respondents have recovered the penal interest levied under section 139(8) amounting to Rs. 17,998 and also the interest levied under section 215 of the Act amounting to Rs. 22,900, the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X
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