TaxTMI 
TaxTMI 
2008 (5) TMI 385
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.... the business of manufacturing of jewellery. According to the assessee, he was regularly submitting his returns to the Income-tax Department. For the assessment year 1990-91, the assessee had declared his income as Rs. 45,000. However, on September 17, 1989, his residential premises were searched by the officers of the Income-tax Department and certain documents were recovered. On the basis of the documents, a notice under section 143(2) of the Act was issued to the assessee. The assessee had appeared before respondent Na 1 from time to time. However, vide order dated March 31, 1993, respondent No. 1 had computed the taxable income of P.s. 12,09,130. Respondent No. 1 computed the tax at Rs. 6,30,142 and charged interest at Rs. 4,99,175. However, according to the assessee, in the order dated March 31, 1993, no specific direction was given indicating that the interest was being charged under sections 234A, 234B and 234C of the Act. The order merely directed, "charge interest as per law" 3. Since the assessee was aggrieved by the order dated March 31, 1993, he filed an appeal before the Commissioner of Income-tax (Appeals). Vide order dated February 18, 1994, certain relief was gra....
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....r itself. Fourthly, in case, the orders do not mention the specific provision of law under which the interest is being levied, then interest cannot be levied by the Department. In order to buttress his contentions, learned counsel for the assessee has relied upon the cases of Ranchi Club Ltd. v. CIT [1996] 217 ITR 72 (Patna), CIT v. Ranchi Club Ltd. [2001] 247 ITR 209 (SC), Smt. Tej Kumari v. CIT [2001] 247 ITR 210 (Patna) [FB], CIT v. Autolite (I) P. Ltd. [2002] 256 ITR 303 (Raj) and Zakir Hussain v. CIT [2006] 202 CTR 40 (Raj). 5. On the other hand, Mr. J. K. Singhi along with Mr. Anuroop Singhi, learned counsel for the respondents, have contended that in the facts and circumstances of the case, interest could be charged only under sections 234A, 234B and 234C of the Act. Therefore, when the Assessing Officer directed "charge interest as per law", naturally he was referring only to the provisions mentioned above. Moreover, the order dated March 31, 1993, was accompanied with the income-tax computation Form ITNS-150, which clearly reveals that the interest payable by the assessee is under sections 234A, 234B and 234C of the Act. The said form also shows the amount to be paid by....
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....n the case of Ranchi Club Ltd. v. CIT [1996] 217 ITR 72 (Patna), the assessment order did not reveal the fact that interest would be charged. Yet still, a demand notice was issued where the interest was charged. However, in the present case, the assessment order clearly mentions that interest shall be charged. Therefore, the decision rendered in the case of Ranchi Club Ltd. v. CIT [1996] 217 ITR 72 by the Patna High Court is distinguishable from the present case. Similarly, the other cases, namely, Autolite (I) P. Ltd. [2002] 256 ITR 303 (Raj), Zakir Hussain [2006] 202 CTR 40 (Raj) and Smt. Tej Kumari [2001] 247 ITR 210 (Patna), the demand notice and not the assessment order was under challenge. Hence, on factual matrix, the cases are distinguishable. 10. Lastly, in the case of Kalyankumar Ray [1991] 191 ITR 634; AIR 1992 SC 159, the hon'ble Supreme Court was specifically seized with the issue whether Form ITNS-150 is deemed to be part and parcel of the assessment order or not? In that case, the assessment order was under challenge. The apex court had held the said form to be part of the assessment order. Therefore, the present case is squarely covered by the case of Knlyankumar....
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....ce under the Act for the assessment year 1991-92, so far as it related to the levy of interest. It had also challenged the vires of sections 234A and 234B of the Act. However, we need not be concerned with the vires of the said two sections, as the said issue is not involved in the present case. Although, with respect, the factual matrix of the case is unclear, but it seems that the Ranchi Club had filed a return for the assessment year 1991-92 on August 19, 1992. It had clearly declared that it had collected Rs.1,58,000 by way of "entrance fee". However, it had denied its liability to pay any tax on the said amount on the principle of mutuality. Subsequently, a best judgment assessment was made under sec Hon 144 of the Act after the petitioner failed to file a revised return under section 139(4) of the Act. The assessment order, however, did not mention anything about the levy of any interest. Interestingly, neither did the demand notice mention "as to under which provision of the Act the interest has been levied". Yet, in the demand notice, under section 156 of the Act, the sum of Rs. 78,322 was mentioned as the interest payable on tax due, i.e., Rs.69,434". 15. The issue whic....
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....ition. Although it had clearly mentioned the generation of Rs.1,58,000 as the amount generated from "entrance fee" but it had argued that the same is not taxable on the principle of mutuality. More over, since the issue was still alive between the assessee and the Revenue, the assessee did not want to concede this point before the Revenue. But, in the present case, there is not a single item that is debatable between the assessee and the Revenue. Secondly, in Ranchi Club's case (supra), the assessment order did not mention about levy of any interest. Moreover, even the demand notice did not mention as to under which provision of the Act the interest has been levied. However, in the demand notice under section 156 of the Act, the sum of Rs.78,322, was mentioned as the interest payable on the tax due, i.e., Rs.69,434. However, in the present case, ITNS-150 Form accompanied the assessment order. The said Form not only revealed the fact that the interest was chargeable under sections 234A, 234B and 234C of the Act but also computed the amount charged as interest under the specific provisions. Thus, unlike Ranchi Club's case (supra) in the present case, the provision and the amount levi....
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....s, reliefs and adjustments available to the assessee, the calculation of the net tax payable is a process which is mostly arithmetical but generally time consuming. If, therefore, the Income-tax Officer first draws up an order assessing the total income and indicating the adjustments to be made, directs the office to compute the tax payable on that basis and then approves of it, either immediately or some time later, no fault can be found with the process, though it is only when both the computation sheets are signed or initialled by the Income-tax Officer that the process described in section 143(3) will be complete." 19. The hon'ble Supreme Court further observed that Form ITNS-150 is also a form for determination of tax payable and when it is signed or initialled by the Income-tax Officer, it is certainly an order in writing by the Income- tax Officer determining the tax payable within the meaning of section 143(3) of the Act. The hon'ble Supreme Court further held that (page 639): "We are unable to see why this document, which is also in writing and which has received the imprimatur of the Income-tax Officer, should not be treated as part of the assessment order in the wi....