1982 (10) TMI 49 - AT - Income Tax

Appellate Tribunal Confirms Interest Charges & Order Validity

The Appellate Tribunal upheld the actions of the Income Tax Officer (ITO) in charging interest under section 217, rectifying the absence of mentioning ... Assessment Order, Interest Payable By Assessee, Share Income Issues:1. Charging of interest under section 217 without specific mention in the assessment order.2. Proper disposal of the assessee's application for rectification.3. Necessity of notice to the assessee before imposing interest under section 217.4. Validity of orders under sections 154 and 155.Analysis:Issue 1: Charging of interest under section 217 without specific mention in the assessment orderThe Appellate Tribunal addressed the contention raised by the assessee regarding the charging of interest under section 217 without specific mention in the assessment order. The Tribunal noted that the demand notice issued by the Income Tax Officer (ITO) included details of interest under section 217, and the levy of interest was considered automatic under the relevant provision. The Tribunal held that the ITO's action in demanding interest through the demand notice after tax calculations was in order. The Tribunal also emphasized that the ITO's action was justified, and the assessee's appeal on this issue was dismissed.Issue 2: Proper disposal of the assessee's application for rectificationThe Tribunal examined the proper disposal of the assessee's application for rectification by the ITO in the order dated 8-3-1979. It was observed that the ITO rectified the absence of mentioning interest under section 217 in the assessment order under section 154. The Tribunal found that the rectification was verbal in nature without altering the calculation, as interest had already been charged during the assessment stage. The Tribunal concluded that the ITO's action in recalculating the interest was justifiable, and the appeal related to this issue was dismissed.Issue 3: Necessity of notice to the assessee before imposing interest under section 217The Tribunal considered the necessity of issuing a notice to the assessee before imposing interest under section 217. It was determined that in the context of the case, the sentence added by the ITO regarding interest under sections 139 and 217 in the order under section 155 did not imply a new levy of interest. The Tribunal clarified that the sentence indicated a revision of interest calculations, providing relief to the assessee. The Tribunal concluded that there was no requirement for issuing a notice to the assessee before making the rectification, and the appeal on this issue was dismissed.Issue 4: Validity of orders under sections 154 and 155The Tribunal analyzed the validity of the orders under sections 154 and 155 passed by the ITO. It was determined that the ITO's actions in both orders were appropriate, considering the automatic imposition of interest under section 217 and the rectification made under section 154. The Tribunal found no substance in the appeals related to the orders under sections 154 and 155 and dismissed both appeals.In conclusion, the Appellate Tribunal upheld the actions of the ITO in charging interest under section 217, rectifying the absence of mentioning interest in the assessment order, and recalculating the interest. The Tribunal dismissed the appeals filed by the assessee on all issues, affirming the validity of the orders passed by the ITO under sections 154 and 155.