1983 (9) TMI 133 - AT - Income Tax

Tribunal Upholds Assessee's Appeal, Rejects Revenue's Claims

The Tribunal dismissed the revenue's appeal, upholding the AAC's decision to cancel the ITO's order under section 154. The Tribunal supported the ... - Issues:- Appeal challenging the order of the AAC of Income-tax canceling the order passed by the ITO u/s 154.- Charging of interest u/s 139(8) and u/s 217(1A) disputed by the assessee.- Validity of the notice issued by the ITO u/s 210 and its compliance with the newly amended requirement of s. 209.- Jurisdiction of the AAC to entertain points raised by the assessee regarding interest levied under specific sections.Analysis:1. The appeal before the Appellate Tribunal ITAT GAUHATI involved a challenge by the revenue against the order of the AAC of Income-tax, which had canceled the order passed by the ITO u/s 154. The ITO rectified the original assessment order due to the revision of the assessment of a firm, leading to the assessee filing a petition claiming that interest under specific sections should not have been charged. The ITO rejected the contentions, and the AAC subsequently deleted the interest levied under u/s 139(8) but upheld the interest under u/s 217(1A).2. The main contention raised by the assessee was regarding the validity of the notice issued by the ITO u/s 210 and its compliance with the newly amended requirement of s. 209. The AAC accepted the assessee's argument that the notice did not conform to the amended requirement, leading to the deletion of a specific amount. The revenue argued that the AAC erred in entertaining the point raised by the assessee and should have upheld the ITO's order. However, the assessee's counsel maintained that the notice issued by the ITO u/s 210 was invalid, and thus, the action taken based on it should be disregarded.3. The Tribunal noted that the ITO did not consider the legal aspect of aggregating agricultural income with other incomes for advance-tax calculation, as required by the amended s. 209. This failure by the ITO to address crucial legal points raised by the assessee was highlighted. The Tribunal agreed with the assessee's counsel that the AAC's decision to cancel the ITO's order was justified based on the legal aspects overlooked in the assessment process.4. Regarding the charging of interest u/s 139(8), the Tribunal found that the AAC's decision to delete the interest levied was sustainable and not contested by the revenue. The Tribunal emphasized that the assessee had the right to appeal against the order u/s 154, which had refused the claims made by the assessee. Therefore, the AAC's decision to cancel the ITO's order and allow the assessee's claim was upheld by the Tribunal based on the facts and circumstances of the case.5. Ultimately, the Tribunal dismissed the appeal by the revenue, affirming the AAC's decision to cancel the ITO's order u/s 154 and uphold the claims made by the assessee regarding the charging of interest and the validity of the notice issued by the ITO u/s 210.