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TMI Blog1980 (3) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... celled by rectification under section 154? " The assessee in this case is carrying on business in hides and skins. For the assessment years 1967-68 and 1968-69, the ITO completed the assessment on March 29, 1972, and while doing so he charged interest under s. 217 of the I.T. Act, hereinafter referred to as the Act, amounting to Rs. 52,110 for 1967-68 and Rs. 57,938 for the year 1968-69 on the ground that the assessee should have filed an estimate of advance tax under s. 212(3) but had failed to do so. On November 9, 1972, the assessee filed an application before the ITO seeking rectification of the assessment orders in so far as levy of the said interest was concerned on the ground that he had been assessed to income-tax for the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year 1965-66 on February 15, 1966, he should be taken to be a person who has been previously assessed by way of regular assessment and as such he was not under an obligation to send an estimate under s. 212(3) and that, therefore, the levy of interest was clearly a mistake apparent from the records and, therefore, the order should have been rectified under s. 154. Before the Tribunal, the revenue did not question the maintainability of the appeals before the AAC but chose to sustain the orders of the AAC on two grounds, (1) that as there was no previous year for the assessment year 1965-66 the proceedings for 1965-66 cannot be taken to have been terminated in a regular assessment and, therefore, the assessee should be taken to be a new ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that the assessment proceedings which were commenced with a notice under s. 139(2) came to be terminated by the ITO passing an order "N. A.". There has been a due consideration of the return filed by the assessee in answer to a notice under s. 139(2) and there has been a determination of the income. Merely from the fact that the assessment has not resulted in payment of any tax it cannot be said that there has been no regular assessment. According to the learned counsel for the revenue, the assessee cannot be said to have been subjected to regular assessment in that the assessee himself had admitted that there was no previous year for the assessment year 1965-66 and there could not have been any valid assessment for that year and, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax liability. In this case as the regular assessment proceedings had commenced for the year 1965-66 by the issue of a notice calling upon the assessee to file a return and it has ended by the issuance of an assessment form followed by a "Nil" demand, it has to be taken that there has been regular assessment proceedings and that the assessee has been assessed for the year 1965-66. The decision in Aruppukottai Chandra Bus Lines v. CIT [1973] 87 ITR 154 (Mad) has been relied on by the revenue in support of its contention that the disposal of the return as "N. A." has to be taken as "not assessable" and if so taken the assessee cannot be said to have been assessed. However, we do not think that the said decision can be of any help to the revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be taken that there was an assessment, and that if as a result of any non-disclosure of materials or relevant facts for the assessment, the income has escaped assessment, it can be brought to tax only by way of reassessment. In our view,therefore, the Tribunal is right in its conclusion that the assessee was not under an obligation to submit an estimate under s. 212(3) as he has been previously assessed. If the assessee who has been previously assessed has been taken erroneously to be a new assessee and penal interest has been charged on the basis that he had not submitted an estimate as required under s. 212(3), then it is clearly a mistake apparent from the record and no elaborate legal argument or factual investigation is necessary to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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