TaxTMI 
TaxTMI 
1982 (4) TMI 157
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....& Challan. Sd/--ITO,, B-Ward, Bhopal Copy to the assessee. ITO., B-Wd, Bhopal. Bhopal /11-9-1980. Total demand 10,041 Less: Tax paid 9,530 Balance payable 511 Intt. u/s 139 (8) 562 215 1,000 220(2) 83 2,156 3. The assessee find an appeal before the AAC contending that the ITO was not justified in enhancing the tax liability of the assessee in the form of charging interest without giving any proper notice to the assessee. It was also contended that the order of the ITO was very sketchy and brief, in which there was no mention regarding charging of interest under the three sections. It was pleaded further that the order of the ITO was illegal because the same has been passed, denying natural justice to the assessee of being ....
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....mplete records, he is handicapped in stating the case of the Dept. Whether notice u/s 154 was issued by the ITO to the assessee and whether proper opportunity was given before passing order u/s 154. On behalf of the assessee, the ld. counsel supports the order of the AAC, while clarifying certain basic aspects of the matter. He states that the assessee filed an application u/s 154 claiming that certain advance-tax paid should be adjusted which the ITO conceded. It is pointed out, however, than in allowing the assessee's petition u/s 154, the ITO has simultaneously levied the interest u/ss 139 (8), 215 and 220, without mentioning any reason therein. That apart, it is submitted that the point involved is debatable and, accordingly, where is t....
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....aside order passed by the ITO u/s 154 which has been done in this case without giving the assessee an opportunity of being heard. In fact, the principle of natural justice has been violated. But the duty of the AAC does not end there. He has duty to issue further directions to the ITO as the facts would warrant and justify it. The Hon'ble Supreme Court in the case of Kapurchand Shrimal vs. CIT (1981) 22 CTR (SC) 345: (1981) 131 ITR 451 (SC), inter alia has noted that it is well known that an appellate authority has the jurisdiction as well as the duty to correct all errors in the proceedings under appeal and to issue, if necessary, appropriate directions to the authority against whose decisions the appeal is preferred to dispose of the whol....
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....ITO to do so. A similar situation has come up in the case of CIT vs. Ramjibhai HirJibhai & Sons 1977 CTR (Guj) 27: (1977) 110 ITR 411 (Guj) in which the Hon'ble Gujarat High Court has held that on plain reading of cl. (iii) of the proviso to s. 139 (1) (b) it was clear that there was an obligation on the ITO to levy penal interest in the manner stated in sub-cls. (a) and (b) of the clause if the assessee fails to furnish the return before the date prescribed or as extended. It was held that the ITO has the power to initiate rectification proceedings and to levy penal interest since the omission upon his part at time of the original assessment was an error apparent from the facts because the relevant provisions of law. The Hon'ble High Court....