INCOME TAX OFFICER v. RANJITSINGH P. GAEKWAD
[Citation -1985-LL-1213-4]

Citation 1985-LL-1213-4
Appellant Name INCOME TAX OFFICER
Respondent Name RANJITSINGH P. GAEKWAD
Court ITAT
Relevant Act Income-tax
Date of Order 13/12/1985
Assessment Year 1978-79
Judgment View Judgment
Keyword Tags rectification order • regular assessment • levy of interest • mistake apparent • share income
Bot Summary: K. R. DIXIT, J. M.: The ground of appeal in this case is that the CIT has erred in quashing the order of the ITO levying interest under s. 215. Thereafter, the rectificatory order was passed by the ITO on the basis of the firm s assessment and added the share income from the firm. The TIO then passed an order under s. 154 levying interest under s. 215. The CIT has observed as follows: In my opinion, only such rectification order under s. 154 can be regarded a s part and parcel of regular assessment which seek to rectify the mistakes which should not have been committed even on the date of regular assessment. Departmental Representative argued that although the order showed that it was passed under s. 154, actually there was power under s. 215 itself to pass that order and that therefore the mention of s. 154 did not invalidate t h e order. Counsel for the assessee has submitted that this was actually an order under s. 154 and since the question was debatable i.e. the expression regular assessment was capable of different interpretation, no order under s. 154 could be passed. The introduction of this amendment itself shows that the accepted position earlier was that no interest under s. 215 could be charged in case of increase in liability for tax.


K. R. DIXIT, J. M.: ground of appeal in this case is that CIT (A) has erred in quashing order of ITO levying interest under s. 215. assessee was partner in firm and he had returned certain income which was assessed under s. 143 (3) subject to rectification. Thereafter, rectificatory order was passed by ITO on basis of firm s assessment and added share income from firm. TIO then passed order under s. 154 levying interest under s. 215. CIT (A) has observed as follows: "In my opinion, only such rectification order under s. 154 can be regarded s part and parcel of regular assessment which seek to rectify mistakes which should not have been committed even on date of regular assessment. In other words, record as it existed on date of regular assessment should form basis of quantification of total income and tax for considering levy of interest under s. 215. Any subsequent decisions or developments would not be covered by term "regular assessment." ld. Departmental Representative argued that although order showed that it was passed under s. 154, actually there was power under s. 215 itself to pass that order and that therefore mention of s. 154 did not invalidate t h e order. It was therefore not necessary that there should be mistake apparent from record. ld. counsel for assessee has submitted that this was actually order under s. 154 and since question was debatable i.e. expression "regular assessment" was capable of different interpretation, no order under s. 154 could be passed. In our view it is unnecessary to enter upon this controversy because s. 215 (3) has been amended w.e.f. 1st April 1985. Under this amendment both charging and refund of interest has been provided for in case of increase in tax liability or decrease thereof respectively, prior to that amendment sub-s. (3) provided only for refund of interest in case of decrease in liability for tax. introduction of this amendment itself shows that accepted position earlier was that no interest under s. 215 could be charged in case of increase in liability for tax. Therefore, we confirm order of CIT (A) although for different reason. appeal is rejected. *** INCOME TAX OFFICER v. RANJITSINGH P. GAEKWAD
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