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Appeals Dismissed for Interest Charges Under s. 158BFA(1) The ITAT dismissed all appeals by the assessees against the charging of interest under s. 158BFA(1) for the block period ending 24th Sept., 1998. The ...
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Appeals Dismissed for Interest Charges Under s. 158BFA(1)
The ITAT dismissed all appeals by the assessees against the charging of interest under s. 158BFA(1) for the block period ending 24th Sept., 1998. The judgment emphasized the mandatory nature of interest collection and the absence of appeal provisions against such charges, as established by relevant Supreme Court precedents.
Issues: Appeals against charging of interest under s. 158BFA(1) in block period ending 24th Sept., 1998.
Analysis: The judgment involves four appeals by assessees against orders passed by the CIT(A)-II, Aurangabad, relevant to the block period ending on 24th Sept., 1998. The appeals were disposed of together due to common points. In one case, the assessee filed the return after the specified date, showing undisclosed income of Rs. 2,00,000, which was later determined at Rs. 3,00,000. The AO charged interest under s. 158BFA(1) from the date specified in the notice u/s 158BC to the date of filing the return. The CIT(A) declined to interfere with the AO's order, citing no provision for appeal against charging of interest.
The assessees argued that the delay in filing the return was due to not receiving inspection and copies of seized documents, requesting the interest not be charged. The Departmental Representative contended that interest is mandatory, and no appeal provision exists against its charging. The ITAT upheld the CIT(A)'s decision, emphasizing that interest is compensatory, not penal, as per Supreme Court rulings. The Court clarified that the term 'shall' in s. 158BFA(1) makes interest collection mandatory, following the precedent set by the case of CIT vs. Anjum M.H. Ghaswala. Since the assessees failed to demonstrate the maintainability of their appeals, the ITAT found no flaw in the CIT(A)'s order, dismissing all appeals.
In conclusion, the ITAT dismissed all appeals by the assessees against the charging of interest under s. 158BFA(1) for the block period ending 24th Sept., 1998. The judgment emphasized the mandatory nature of interest collection and the absence of appeal provisions against such charges, as established by relevant Supreme Court precedents.
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