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TMI Blog1984 (5) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... ollowing questions of law have been framed for the opinion of this court., "1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in refusing to admit the additional ground claiming that the assessee's income for the assessment years 1963-64 and 1964-65 was exempt under section 11 of the Income-tax Act, 1961 ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that there was no appeal provided against the charging of interest under s. 217 of the Act and in declining to adjudicate upon the correctness of charging of interest under that section ? " The relevant facts may be extracted from the statement of the cases. These are two reference applications made under s. 256(1) of the Act by the assessee-Corporation and common questions of law for the assessment years 1963-64 and 1964-65 arise out of the Tribunal's consolidated order dated September 15, 1973. The assessee, as has already been stated above, is the Bihar State Road Transport Corporation. In respect of both the years, the original grounds of appeal were only in relation to the charging of interest under s. 217 of the Act. Subsequently ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave been waived or reduced. It was contended on behalf of the Revenue that the charging of interest under s. 217 was not appealable before the AAC and, therefore, the consideration of this matter by the AAC was not correct. The Tribunal referred to the provisions of s. 246 and held that the charging of interest under s. 217 bad not been made appealable under that section. It further referred to the provisions of ss. 2l 5 and 217 of the Act in order to show that although the charging of interest under s. 216 was made appealable under s. 246(m), there was no such specific provision for appeal with respect to charging of interest under ss. 215 and 217 in so far as there was a provision for waiver or reduction of the amount of interest which were to be governed by the statutory rules framed under the Act. These are the only facts on which the present references have been made. I shall first take up point No. 1 with regard to the admissibility of the additional grounds. I have no hesitation in coming to the conclusion that the additional grounds raised in relation to the applicability of s. 11 of the Act could not be so raised by the assessee at the time of hearing of the appeal by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the point in an appeal to the Appellate Tribunal against the order of the AAC and the Tribunal is not entitled to allow the assessee to agitate the question under the guise of granting leave under rule II of the Income-tax (Appellate Tribunal) Rules, 1963. All these cases are a pointer in one direction that on the facts and in the circumstances of the case the assessee was not entitled to raise these new grounds as a question of law for which the foundational facts or, for that matter, any relevant fact were not brought on the record either before the ITO or before the AAC. I, therefore, am constrained to hold that the Tribunal was right in not allowing the additional grounds with regard to the exemption claimed by the assessee under s. 11 of the Act to be raised before it. Coming now to the only other question as to whether the charging of interest under s. 217 was appealable or not, on the facts and in the circumstances of the cases, I shall hold that it was appealable. The consensus of judicial opinion is to the effect, in so far as I have been able to see it, that where the charging of interest forms a composite part of the assessment order itself and where the quantum of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urring in s. 30(1) of the 1922 Act. On proper construction of the relevant phrase occurring in s. 30(1) of that Act, it had to be held that in the former type of cases an appeal would lie to the AAC whereas no appeal would lie merely against the quantum of interest charged by the ITO on the assessee. An assessee can prefer an appeal to the AAC against his regular assessment and urge all contentions which, if accepted, must result in the ITO holding that there was no liability to pay advance tax, and, therefore, there was no liability to penal interest, or, even in an appeal preferred against an order charging penal interest, it would be open to him to raise a contention that the income in respect of which tax is imposed and in respect of which interest is calculated for the purpose of s. 18A(8) was not income which fell under the head covered under s. 18A or he could contend that the income calculated by the ITO as income of the assessee for the relevant year was not the proper income and that there was no income at all or the income was less than the income calculated. It is clear, therefore, that if the assessee raises an objection to the regular assessment purported to be made b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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