1984 (11) TMI 156 - AT - Income Tax

ITAT decision on interest charges for assessment year 1981-82 upheld by Tribunal

The appeal before ITAT NAGPUR related to the assessment year 1981-82, disputing the deletion of interest charged under sections 139(8)/215/217. The AAC ... Appellate Assistant Commissioner Issues:1. Maintainability of appeal against charging of interest under section 139(8)/215/217.2. Jurisdictional aspects of the assessment order passed by the ITO.3. Applicability of specific legal provisions for appeal against orders under section 147.4. Merits of the case regarding the levy of interest under sections 139 and 215.Detailed Analysis:1. The appeal before the Appellate Tribunal ITAT NAGPUR related to the assessment year 1981-82 and disputed the deletion of interest charged under sections 139(8)/215/217 of the Income-tax Act, 1961 by the AAC. The primary issue was whether an appeal objecting to the levy of penal interest alone is maintainable. The counsel for the assessee argued that the appeal is maintainable as the assessee denied liability to be assessed to penal interest, citing relevant case laws from various High Courts. The AAC, following legal precedents, held that the appeal against charging of interest under sections 139 and 215 is admissible, leading to the deletion of the interest charged by the ITO. The revenue appealed this decision before the ITAT.2. During the appeal hearing, the departmental representative raised a ground challenging the AAC's jurisdiction in entertaining the appeal against the interest charged under section 139(8)/215/217. The representative argued that the ITO's order was not passed in reassessment proceedings but in regular proceedings, making the appeal not maintainable. The counsel for the assessee countered this argument by asserting that the initiation of proceedings under section 147 occurred upon the issue of notice under section 148, making the assessment order fall under section 147. The ITAT noted that the late challenge on the appeal's maintainability was not valid and held that the appeal against the order under section 147 challenging the levy of interest is maintainable, as per the provisions of the Income-tax Act.3. The ITAT further analyzed the legal provisions regarding the appealability of orders under section 147, emphasizing the distinction between clauses (c) and (e) of section 246. It concluded that the appeal against an order under section 147 falls under clause (e) of section 246, allowing for a broader scope of grounds to be raised in such appeals. The Tribunal rejected the departmental representative's preliminary objection on the maintainability of the appeal, affirming that the appeal challenging the levy of interest under section 139 and 215 was admissible.4. Regarding the merits of the case, the ITAT considered the jurisdictional aspects of the assessment order passed by the ITO and upheld the AAC's decision based on legal precedents and the specific provisions of the Income-tax Act. The Tribunal dismissed the appeal filed by the revenue, affirming the deletion of the interest charged under sections 139 and 215 by the AAC, thereby concluding the legal proceedings in favor of the assessee.