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Addl. Commissioner of Income-tax Vs. Allahabad Milling Co. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAllahabad High Court
Decided On
Case NumberIncome-tax Reference No. 861 of 1972
Judge
Reported in[1978]111ITR111(All)
ActsIncome Tax Act, 1961 - Sections 215, 215(3) and 246
AppellantAddl. Commissioner of Income-tax
RespondentAllahabad Milling Co.
Appellant AdvocateDeokinandan and ;Ashok Gupta, Advs.
Respondent AdvocateB.C. Dey, Adv.
Excerpt:
- .....court: 'whether, on the facts and in the circumstances of the case, the tribunal could direct the appellate assistant commissioner to give his decision on the additional ground which had been taken before him in the appeals for 1964-65 and 1965-66 that the income-tax officer has erred in charging penal interest under section 215 of the income-tax act, 1961 ?' 2. the facts giving rise to this reference are these. the assessee filed an appeal against the assessment order and disputed certain additions and disallowance made by the income-tax officer. at the time of hearing of the appeal an additional ground was raised on behalf of the assessee. that ground was that the income-tax officer erred on facts and in law in charging penal interest under section 215 for filing a low estimate of the.....
Judgment:

R.M. Sahai, J.

1. The following question has been referred by the Income-tax Appellate Tribunal, Allahabad (shortly called 'the Tribunal'), for the opinion of this court:

'Whether, on the facts and in the circumstances of the case, the Tribunal could direct the Appellate Assistant Commissioner to give his decision on the additional ground which had been taken before him in the appeals for 1964-65 and 1965-66 that the Income-tax Officer has erred in charging penal interest under Section 215 of the Income-tax Act, 1961 ?'

2. The facts giving rise to this reference are these. The assessee filed an appeal against the assessment order and disputed certain additions and disallowance made by the Income-tax Officer. At the time of hearing of the appeal an additional ground was raised on behalf of the assessee. That ground was that the Income-tax Officer erred on facts and in law in charging penal interest under Section 215 for filing a low estimate of the advance tax. The Appellate Assistant Commissioner did not consider this new ground as in his opinion no appeal is provided under Section 246 of the Income-tax Act, 1961, against an order passed under Section 215. He, however, allowed the appeal partly on other grounds.

3. The assessee took the matter in further appeal wherein it challenged certain disallowances made by the Income-tax Officer. It (the assessee) reiterated the additional ground sought to be raised by it before the Appellate Assistant Commissioner regarding chargeability of penal interest. The Tribunal accepted the contention, allowed the appeal in part and directed the Appellate Assistant Commissioner to decide the appeal afresh regarding chargeability of penal interest.

4. We have heard learned counsel for the parties. The power of the Appellate Assistant Commissioner to entertain and decide an appeal is contained in Section 246 of the Act. A perusal of this section shows that although orders passed under various sections of the Act have been made appealable, no appeal is provided against an order passed under Section 215. It is thus clear that no appeal can be filed against an order under Section 215 directing payment of interest for low estimate of the advance tax. It is no doubt true that Sub-section (4) of Section 215 confers a discretion on the Income-tax Officer to reduce or waive such interest in appropriate cases. In that sense, it can be said that the levy of interest is not automatic. In Vidyapat Singhania v. Commissioner of Income-tax : [1977]107ITR533(All) , a Division Bench of this court, while interpreting analogous provisions contained in the Indian Income-tax Act, 1922, observed thus:

'It would have been desirable to provide an appeal against the orderof the Income-tux Officer imposing interest in view of the amendments butunfortunately no corresponding amendment was made in Section 30 and theposition remained as it was before the amendment. The right of an appealis given by the legislature and the courts cannot stretch the language of aprovision in order to spell out such a right if none is provided by thestatute.'

5. However, no provision for such appeal has yet been made by the legis-lature. What cannot be done directly cannot be done indirectly. If thelegislature has not provided for any appeal against an order passed under Section 215 it is difficult to accept the contention on behalf of the assesseethat in an appeal filed against an order of assessment on other grounds itis open to the assessee to challenge the chargeability of interest by the Income-tax Officer under Section 215(3), as a result of reduction of theamount on which interest was payable, by an order under Section 154, or Section 155, or Section 250 or Section 254 or Section 260 or Section 262 or; Section 264 is altogether different from challenging in appeal the correctnessof the levy of interest under Section 215.

6. For the reasons stated above we answer the question referred to us in the negative, in favour of the Commissioner of Income-tax and against theassessee. Our answer is as follows :

'On the facts and in the circumstances of the case, the Tribunalcould not direct the Appellate Assistant Commissioner to give his decision on the additional ground regarding chargeability of interest under Section 215 of the Income-tax Act, 1961.'

7. In the circumstances of the case, we direct the parties to bear their owncosts.


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