9911796707
TMI Blog2001 (12) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... ssments made under s. 143(3) r/w s. 147. In the reassessment, the AO directed to levy interest under s. 215. This reassessment was subjected to appellate proceedings before the CIT(A). The CIT(A) allowed some relief to the assessee. The AO while giving effect to the order of the CIT(A) modified the interest charged under s. 215. The assessee filed applications under s. 154 requesting the AO to delete the interest charged under s. 215 as no such interest could be charged in the reassessment. The AO rejected the applications of the assessee. However, on appeal the CIT(A) directed the AO to carry out the rectification and he has also held that the AO can charge interest only upto the date of first assessment and on the tax determined in the fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ul consideration to the rival contentions. If one goes by the contentions advanced on behalf of the assessee before us, the matter seems to be quite simple. However, when one peeps deep into the facts of this case, the issue is slightly complicated. The facts found by us during the course of arguments and after obtaining the orders of the CIT(A) in quantum appeal are indicated as under: 6. Assessments for asst. yrs. 1987-88 and 1988-89 had been made under s. 143(1). Since the advance tax paid by the assessee was more than the assessed tax under s. 143(1), interest under s. 215 was not chargeable. Accordingly, the AO did not charge any interest under s. 215. Subsequently, the assessments were reopened under s. 147 for both the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uential and, therefore, the AO will recalculate interest while giving effect to this order." 8. The AO gave effect to the orders of the CIT(A) and recalculated interest under s. 215 as per the directions of the CIT(A). The assessee filed an application under s. 154 for asst. yr. 1987-88. Similar application was filed for asst. yr. 1988-89 claiming that there was a mistake in the order giving effect to the order of the CIT(A) insofar as interest under s. 215 which was not chargeable had been charged by the AO. The AO rejected the application under s. 154 for both the assessment years against which the assessee filed appeals to the CIT(A). The CIT(A) vide order dt. 9th Feb., 1996, decided the appeals for asst. yrs. 1987-88 and 1988-89 hold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, the mistake, if any, of charging interest under s. 215 in the reassessment under s. 147 could not be rectified by the AO, his order having merged with the decision of the CIT(A). Therefore, while deciding the appeals of the assessee against the rejection of application under s. 154 by the assessee, the CIT(A) was wrong in asking the AO to delete the interest charged under s. 215. 10. In view of this legal position, the assessee though entitled to relief in separate proceedings is likely to suffer because of technical hiccup. We being conscious of the fact that the income-tax law was so complicated that the majority of the taxpayers are unable to appreciate the niceties of law and the proper remedies to be taken against the decisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appeal of the assessee against the order under s. 154 of the AO on 9th Feb., 1996. On that date, the decision of the Hon'ble Supreme Court in the case of Modi Industries Ltd. Ors. was available. Since it is well-settled law that the decision of the Hon'ble Supreme Court relates back to the date of assessment Walchand Nagar Industries vs. V.S. Gaitonde, ITO Anr. (1962) 44 ITR 260 (SC), the CIT(A) was justified in taking cognizance of that decision in deciding the issue. It may, however, be relevant to point out that their Lordships of the Hon'ble Supreme Court in the case of Modi Industries Ltd. Ors. on the basis of the law as applicable to the assessment year involved in that case, held that interest under s. 214/215 is payable/char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 263 or s. 264 or on order of the Settlement Commission under sub-s. (4) of s. 245D, the amount on which interest was payable under sub-s. (1) has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly, and— (i) in a case where the interest is increased, the AO shall serve on the assessee, a notice of demand in the prescribed form specifying the sum payable, and such notice of demand shall be deemed to be a notice under s. 156 and the provisions of this Act shall apply accordingly; (ii) in a case where the interest is reduced, the excess interest paid, if any, shall be refunded." As is evident from the language of s. 215(3) quoted above, s. 147 has also been incorporated for the purp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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