Skip to content


Ramjilal Shivhare Vs. Income-tax Officer - Court Judgment

LegalCrystal Citation
CourtIncome Tax Appellate Tribunal ITAT Delhi
Decided On
Judge
Reported in(1982)2ITD244(Delhi)
AppellantRamjilal Shivhare
Respondentincome-tax Officer
Excerpt:
1. these appeals by the assessee, shri ramjilal shivhare of morena, an individual, directed against the consolidated order of the aac, gwalior range, gwalior, dated 25-8-1980, which have been consolidated, heard together and are being disposed of by a common order for the sake of convenience. the years of assessment involved are 1965-66 to 1970-71, 1973-74 and 1974-75.2. the ito had completed the original assessments of the assessee for the accounting periods relevant to the assessment years 1966-67 to 1970-71, on 26-6-1971, with the following dates of the filing of the returns for those years:assessment year date of filing of return1966-67 20-3-1971 3. it appears that the business and the residential premises of the assessee were searched under section 132 of the income-tax act, 1961.....
Judgment:
1. These appeals by the assessee, Shri Ramjilal Shivhare of Morena, an individual, directed against the consolidated order of the AAC, Gwalior Range, Gwalior, dated 25-8-1980, which have been consolidated, heard together and are being disposed of by a common order for the sake of convenience. The years of assessment involved are 1965-66 to 1970-71, 1973-74 and 1974-75.

2. The ITO had completed the original assessments of the assessee for the accounting periods relevant to the assessment years 1966-67 to 1970-71, on 26-6-1971, with the following dates of the filing of the returns for those years:Assessment year Date of filing of return1966-67 20-3-1971 3. It appears that the business and the residential premises of the assessee were searched under Section 132 of the Income-tax Act, 1961 ('the Act') on 10-2-1974. Thereafter, the assessee on 20-3-1974, filed the original return for the accounting period relevant to the assessment year 1965-66 and revised returns for the assessment years 1966-67 to 1971-72 and 1973-74 detailing the following income, compared to the income as per the original returns :Assessment Income as per original Income as per revised returnyear return1965-66 6,300 31,9001966-67 400 29,8001967-68 400 34,0001968-69 4,870 32,9001969-70 6,800 39,5001970-71 7,000 34,4001971-72 10,248 17,3001973-74 21,799 69,000 Admittedly, the revised returns filed by the assessee for the accounting periods relevant to the assessment years up to 1971-72 were not valid in law, as the assessments for those years were not pending on 20-3-1974. So was the position regarding the return for the assessment year 1975-76 because the time for filing the voluntary returns had already elapsed. Noticing this position the ITO issued notices under Section 148 of the Act for the assessment years 1965-66 to 1971-72 on 26-3-1974, which were served on the assessee on 29-3-1974 with a view to assess income, which, according to him, had escaped assessments, in view of the revised returns filed by the assessee.

4. On 8-10-1974, the Voluntary Disclosure of Income and Wealth Ordinance, 1975, was promulgated. The assessee, taking advantage of the said Ordinance, filed a declaration under Section 14(1) of the Act of the said Ordinance, on 21-12-1975, declaring the following undisclosed incomes :Assessment year Income-disclosed under Voluntary Disclosure Scheme 5. The ITO while completing the reassessments for the assessment years 1965-66 to 1971-72, and assessment for the assessment year 1973-74, on 24-2-1976, did not charge interest under Sections 139 and 217 of the Act, nor did he initiate penalty proceedings under Section 271(1)(a) and d)(c) for all the said years, under Section 273(6) for the assessment years 1965-66 to 1967-68 and under Section 273(c) for the assessment year 1973-74, as he was then of the opinion that the difference between the income originally assessed and the income as per revised returns, as brought out above, was covered by the aforesaid disclosure by the assessee under Section 14(1) of the aforesaid Ordinance and so gave the assessee immunity against the charging of interest and the initiation of the aforesaid penalty proceedings. This belief of the ITO for the said years was later on considered by him, the ITO, as tantamount to mistake apparent on record, inasmuch as the immunity in Section 14 in this behalf was not available, the assessee having already disclosed in the returns filed prior to 8-10-1975, the income purported to have been declared under Section 14(1) of the aforesaid Ordinance. The said declaration, according to the ITO, was not valid. He, therefore, issued show cause notices to the assessee as to why the above mistake be not rectified. In reply, the stand taken by the assessee was that there was no mistake apparent on the face of the record for any of the years, i.e., 1966-67 to 1970-71 and 1973-74, that there was no mention of the penalty or charging of interest in the assessment orders for those years and that the conclusion by him, in this behalf, was arrived at after detailed discussion in the assessment orders. These arguments of the assessee were rejected and the ITO came to the conclusion that the present case was a case of mistake apparent from record, and he by his consolidated order dated 12/18-2-1980 for the assessment years 1966-67 to 1970-71 and 1973-74 directed as under : The mistake being apparent from record is rectified by starting penalty proceedings under Sections 271(1)(a) and (c) for all the years, 273(6) for the assessment years 1965-66,' 1966-67 and 1967-68 and Section 273(c) for the assessment year 1973-74. Penalty interest under Sections 139(8) and 217 shall also be charged as per rules.

6. For the assessment year ,1974-75, the ITO directed the initiation of the penalty proceeding under Section 273(c) and interest under Section 217, which he, at the time of completing the assessment for that year, had omitted to initiate and charge.

7. Aggrieved by the aforesaid orders of the ITO under Section 154, the assessee brought the matter by way of appeals before the AAC, who upheld the aforesaid orders for the years under consideration by observing as under : I am not, inclined to agree with the appellant. The ITO has not made any detailed discussion on this issue in his order passed under Section 143(3) wherein only a passing reference has been made to the fact that the appellant had made voluntary disclosure in respect of all sums involved in different years. This basic statement of fact itself is wrong. In fact the appellant had not made any disclosure as the returns had already been filed. The declaration made by the appellant did not disclose any extra income. He merely filed in the same figures in the disclosure forms instead of mentioning them in the income-tax return forms as already filed. Secondly, no long drawn process of law is required to ascertain this simple factual and legal fact. Thus, I do not find any merit in these appeals. To make the matter more explicit, it is necessary here to understand relevant provisions of the V.D. Scheme. According to this scheme promulgated on 8-10-1975 the appellant was free to make voluntary disclosure of income which could mean the disclosure in case of a person who had never been assessed to income-tax or wealth-tax in the past or to a person who had been assessed to the above two taxes in the past. It could also apply to persons who had both filed the returns which were pending for assessment. In case of the third category of persons the scheme could apply only if the appellant was to declare something in addition to what had already been disclosed by him in the returns already filed before the department. The immunity from penal action and interest was to apply exclusively to the amounts so disclosed. The scheme of the Act did not provide that a person could simply wish that the returns already filed by him and pending for assessments before the ITO/WTO should be taken to have been filed under the V.D. Scheme, on performance of the mere formality of filing the same returns again. This would defy the very purpose of this scheme. Thus, if any assessee ever sought immunity under the scheme in the above manner and even if the ITO allowed it, it would remain ab initio void. It would have no legal force as it is legally impossible to grant immunity in above circumstances.

Nothing could be done by the ITO which had not been provided in the law. Still if the ITO allows immunity in the above specified circumstances it would merely constitute a mistake apparent from records, the patent mistake of law which could be rectified, suo moto or on the attention of the ITO being drawn by the appellant himself realising the mistake committed by himself and the ITO. In the instant case also the returns of income were already pending before coming into operation of the Voluntary Disclosure Scheme. The appellant merely sought immunity on these returns without declaring any extra income. This was legally not possible and the mistake is simply a mistake apparent from records. It has rightly been rectified by the ITO.8. In the appeals filed by the assessee before the Tribunal, the departmental representative has raised a preliminary objection that the appeals of the assessee are against the aforesaid orders of the ITO for the years under consideration under Section 154 and so the present appeals by the assessee against the consolidated order of the AAC were not maintainable because the aforesaid impugned-orders of the ITO under Section 154 was neither covered by Section 246(1) or (o) of the Act, inasmuch as the appeals of the assessee against the aforesaid order of the ITO under Section 154, which was subjected by way of appeals before the AAC, were not orders imposing penalty under Section 271(1)(a)1(c)1273(1))1(c), and so beyond the ambit of Section 246(0) of the Act. Further, the said impugned orders of the ITO under Section 154 were not orders having the effect of enhancing the assessments or reducing a refund, inasmuch as firstly, by the said orders the ITO had not charged any interest and secondly, the charging of interest under Section 139(8)/217 was not tantamount to an order having the effect of enhancing the assessment. These arguments of the revenue are controverted by the learned counsel for the assessee, Shri O.P. Vaish, who has urged that the aforesaid orders of the ITO under Section 154 had the effect of enhancing the assessments, inasmuch as interest on the basis of those orders has been charged by issuing the necessary demand notice, in that behalf on the basis of the said orders, there being no other order of the ITO in this behalf. The impugned orders of the ITO are under Section 154 and not one under Section 139(8)/217.

9. We have given consideration to the above arguments. Sections 154 and 246, insofar as these are relevant for our present discussion, read as under: 154. (1) With a view to rectifying any mistake apparent from the record- (a) the Income-tax Officer may amend any order of assessment or of refund or any other order passed by him ; (3) An amendment, which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee, shall not be made under this section unless the authority concerned has given notice to the assessee of its intention so to do and has allowed the assessee a reasonable opportunity of being heard.

Any assessee aggrieved by any of the following orders of an Income-tax Officer may appeal to the Appellate Assistant Commissioner against such order- (f) an order under Section 154 or Section 155 having the effect of enhancing the assessment or reducing a refund or an order refusing to allow the claim made by the assessee under either of the said section : The first controversy before the revenue, on one hand, and the assessee on the other hand, centres round the meaning to be given to the words 'having the effect of enhancing the assessment or reducing a refund' appearing in Section 246(1). It may be added, as is clear from Section 154 as reproduced above, that identical words appear in Section 154(3) of the Act. As to the exact meaning to be given to the aforesaid words, 'having the effect of enhancing the assessment', in Section 246(1) which also appear in Section 154(3), I would do no better than refer to the decision of the Supreme Court in the case of M. Chockalingam & M.Meyyappan v. CIT [1963] 48 ITR 34. The facts of this case are that Chockalingam and Meyyappan were the sons of Meyyappa Chettiar. At first, the assessment was on the HUF, but by an order of the Madras High Court, dated 5-12-1949 a partial partition in the family was recognised from the assessment year 1940-41. The said judgment of the High Court was given effect to, after 1953, and the assessments for the years 1951-52 and 1952-53 were made on the brother, individuals and were competed cm 11-7-1953 and 30-8-1954, respectively, for the said two years. The assessee had not paid advance tax according to their own estimate of income for those years and they were liable to penal interest under Section 18A(8) of the Indian Income-tax Act, 1922 ('the 1922 Act'). The ITO, Karaidudi, overlooked this fact and did not add penal interest to the tax leviable. In 1956, the ITO started proceedings under Section 35 of the 1922 Act, for the rectification of the assessment, and he passed the order levying the penal interest under Section 18A(8) of the 1922 Act, without issuing the notice contemplated in Section 35 as is laid down in Section 154(3) of the Act reproduced above. The said assessee, thereupon, filed writs urging that the ITO could not levy the penal interest under Section 18A(8) of the 1922 Act without giving notices to them, as the order for the levy of penal interest was an order having the effect of enhancing the assessment. These writs were dismissed] by the High Court. The assessee then brought the matter by way of appeals before the Supreme Court.

Their Lordships of the Supreme Court at have held that since the effect of rectification would be the enhancement of the assessment, the ITO before levying penal interest, by taking recourse to Section 35 of the 1922 Act, should have given notices to the assessee. Since that was not done, the order of the ITO charging penal interest was quashed. While so deciding, Hon'ble Mr. Justice M. Hidayatullah (as he then was) has observed : . . . It is more so in this case where the proviso to Section 35 itself makes it incumbent upon the Income-tax Officer to give notice and a hearing to an assessee when the effect of the rectification would be the enhancement of the assessment. The learned counsel for the department raised the forlorn argument that the addition of penal interest is not enhancement of assessment as stated in the proviso. We do not see what else it could be. The word 'assessment' is used in the proviso not as an equivalent of the tax calculated at the rate given in the Finance Act but the total amount which the assessee is required to pay. The proviso applies whenever the effect of the order is to touch the pocket of the assessee and in our opinion this was such a case. (p. 41) 10. The ratio of the above decision of the Supreme Court is on all four in the present case. By the impugned orders, notices of demand charging interest under Section 139(8)/217 have been issued, there is no other order by the ITO in this behalf. These orders of the ITO under Section 154, are the orders levying interest under Section 139(8)/217. Since, by the said orders, the total amount which the assessee in the present case was required to pay was more than that originally raised as a result of the original assessments for the years under consideration, these orders have the effect of enhancing the assessment. The effect of these orders by the ITO is to touch the pocket of the assessee. That having happened, the assessee would be perfectly justified to file the appeals before the AAC, being aggrieved from the aforesaid orders under Section 154 having the effect of enhancing the assessment for the years under consideration. Secondly, the appeals by the assessee were against the orders of the ITO under Section 154. These were not appeals against orders under Section 139(8)1217. The preliminary objection by the revenue is without force and has to be rejected. We further, on the facts and circumstances of the case, hold that the appeals by the assessee before the AAC were competent, being within the ambit of Section 246(1).

11. Admittedly, the ITO prior to the completion of assessments on, or at the time of, completing the original assessments of the assessee for the years under consideration had not initiated penalty proceedings under Section 271(1)(a)/(c)/273(b)/(c). Could he (the ITO), having not done so, as required by Sections 271/273, take over the power to initiate these proceedings by passing the impugned orders under Section 154 Our answer to the said question, after hearing the learned counsel for the assessee Shri O.P. Vaish and the departmental representative, is in the negative. In this connection, we will first refer to the provisions of Section 271(1)/273 which are in the following terms : 271. (1) If the Income-tax Officer or the Appellate Assistant Commissioner or the Commissioner (Appeals) in the course of any proceedings under this Act, is satisfied that any person- (a) has without reasonable cause failed to furnish the return of total income which he was required to furnish under Sub-section (1) of Section 139 or by notice given under Sub-section (2) of Section 139 or Section 148 or has without reasonable cause failed to furnish it within the time allowed and in the manner required by Sub-section (1) of Section 139 or by such notice as the case may be, or ** ** ** (c) has concealed the particulars of his income or furnished inaccurate particulars of such income, he may direct that such person shall pay by way of penalty- (i) in the cases referred to in Clause (a)- (a) in the case of a person referred to in Sub-section (4A) of Section 139, where the total income in respect of which he is assessable as a representative assessee does not exceed the maximum amount which is not chargeable to income-tax a sum not exceeding one per cent of the total income computed under this Act without giving effect to the provisions of Sections 11 and 12, for each year or part thereof during which the default continued ; (b) in any other case, in addition to the amount of the tax, if any, payable by him, a sum equal to two per cent of the assessed tax for every month during which the default continued ; 273. If the Income-tax Officer, in the course of any proceedings in connection with the regular assessment for assessment year commencing on the 1st day of April, 1970 or any subsequent assessment year, is satisfied that any assessee- (b) has without reasonable cause failed to furnish an estimate of the advance tax payable by him in accordance with the provisions of Sub-section (3) of Section 212, or (c) has without reasonable cause failed to furnish an estimate of the advance tax payable by him in accordance with the provisions of Sub-section (3A) of Section 212, he may direct that such person shall, in addition to the amount of tax, if any, payable by him, pay by way of penalty a sum- (i) which, in the case referred to in Clause (a), shall not be less than ten per cent but shall not exceed one and a half times the amount by which the tax actually paid during the financial year immediately preceding the assessment year under the provisions of Chapter XVII-C falls short of- (1) seventy-five per cent of the assessed lax as defined in Sub-section (5) of Section 215, or (2) where a notice under Section 210 was issued to the assessee, the amount payable thereunder, whichever is less ; and (ii) which, in the case referred to in Clause (b), shall not be less than ten per cent but shall not exceed one and a half times of seventy-five per cent of the assessed tax as defined in Sub-section (5) of Section 215 ; and (iii) which, in the case referred to in Clause (c), shall not be less than ten per cent but shall not exceed one and a half times the amount by which the tax payable under the notice issued to the assessee under Section 210 falls short of seventy-five per cent of the assessed tax as defined in Sub-section (5) of Section 215.

A perusal of the provisions of Sections 271/273 makes it abundantly clear that the process of initiation of the penalty proceedings under Section 271(1)(a)/(c)/273(6)/(c) is to be initiated in the course of the assessment proceedings, prior to its coming to an end by making an assessment order. Though this conclusion is obvious from plain reading of Section 271(1)/273, we will cite a recent decision of the Delhi High Court in support of our said view. This case is reported as CIT v.Rajinder Kumar Somani [1980] 125 ITR 756 (Delhi). The facts in that case are that the ITO completed the assessment of the assessee for the assessment year 1959-60, on 28-11-1963. At the end of the assessment order he observed : "penalty proceedings for not filing the return in time and for not paying the tax in advance by not complying with the provisions of Section 18A(3) of the Indian Income-tax Act, 1922, are to be initiated separately." Thereafter, on 16-12-1963, the ITO issued two notices, one under Section 274 of the Act, calling upon the assessee to show cause, why penalty should not be levied under Section 273, for failure to pay advance tax and another under Section 271(1)(o) for delay in filing of the return, and the notices were served separately only after the service of the assessment order and notice of demand as in the present cases. And the ITO levied penalties. The Tribunal held-that the ITO in the assessment order, did not direct the office to issue any notice for penalty, the notices were not even served upon the assessee along with the assessment order and notice of demand, and that, therefore, the penalty proceedings had not been initiated during the pendency of the assessment proceedings, and the levy of the penalties had to be set aside. The said decision was affirmed by the Delhi High Court. It agreed with the Tribunal that the action for imposition of penalty must be initiated in the course of the assessment proceedings.

12. Keeping in view the above decision, let us come to the facts of the present case. Admittedly, the ITO did not initiate penalty proceedings under Section 27l(1)(a)/(c)/273(Z)/(c) of the Act, in the course of the original assessment orders of the assessee for each of the years under consideration. Having not done so, a right had come to be vested in the assessee, whereby the ITO was debarred from initiating those penalty proceedings after making of the original assessment orders for the years under consideration. Having failed to initiate those penalty proceedings in the course of the original assessment orders, the ITO cannot arm himself with the authority to do something in the shape of initiating the penalty proceedings by passing the impugned orders under Section 154, which he could not otherwise do in law, having failed to do so in the course of the assessment proceedings. This will be tantamount to abuse of the process of law. The ITO having not initiated those proceedings, in the course of the assessment proceedings, as required by law, cannot revive that right which ceased to be available to him, by passing the impugned orders under Section 154. Such a case will not be a case of mistake apparent from record, but one of abuse of the process of law. We, therefore, agree with the assessee in this behalf. The action of the ITO, in passing the impugned orders, to arm himself with the power to initiate the penalty proceedings under Section 271(1)(0)/(c)/273(6)/(c) by passing the impugned orders under Section 154 is, therefore, bad in the eyes of law and could not be made under Section 154. We hold likewise.

13. The provisions of Section 139 in the matter of levy of interest under certain contingencies constitute substantive and not procedural law. Since it is substantive law, the law to be applied in this behalf is that in force in each of the assessment years under consideration, since there is nothing in the amended provisions enacted subsequently, which can be stated or implied to lay down to the contrary. In other words, the Income-tax Act in the matter of charging of interest under Section 139, as it stood prior to its amendment, on the 1st April of a financial year for each of the years under consideration must apply to the assessment of that year. Any amendment in the Act which came into force after the 1st April of a financial year would not apply to the assessment for the year, even if the assessment is actually made after the amendment came into force. These propositions are well settled.

Because the years under consideration involved in the matter of charging of interest under Section 139, as is clear from the impugned orders of the ITO under Section 154, are the accounting periods relevant to the assessment years 1965-66 to 1970-71 (about this aspect there is no dispute between the parties), Section 139(8) which has been invoked by the ITO for charging interest will not be available to the ITO for charging that interest because Section 139(8) which is sought to be made use of by the ITO was substituted by the Taxation Laws (Amendment) Act, 1970 w.e.f. 1-4-1972. The present case is a case of wrong labelling. The interest charged by the ITO is that one under Section 139(1) read with Section 139(8) as it stood in each of the years under consideration to the following effect : 139. (1) Every person, if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax, shall furnish a return of his income or the income of such other person during the previous year in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed- (a) in the case of every person whose total income, or the total income of any other person in respect of which he is assessable under this Act, includes any income from business or profession, before the expiry of four months from the end of the previous year or where there is more than one previous year, from the end of the previous year which expired last before the commencement of the assessment year, or before the 30th day of June of the assessment year, whichever is latter ; (b) in the case of every other person, before the 30th day of June of the assessment year : Provided that, on an application made in the prescribed manner, the Income-tax Officer may, in his discretion, extend the date for furnishing the return- (i) in the case of any person whose total income includes any income from business or profession the previous year in respect of which expired on or before the 31st day of December of the year immediately preceding the assessment year, and in the case of any person referred to in Clause (b), up to a period not extending beyond the 30th day of September of the assessment year without charging any interest ; (ii) in the case of any person whose total income includes any income from business or profession the previous year in respect of which expired after the 31st day of December of the year immediately preceding the assessment year, up to the 31st day of December of the assessment year without charging any interest ; and (iii) up to any period falling beyond the dates mentioned in clauses (i) and (ii), in which case, interest at nine per cent per annum shall be payable from the 1st day of October or the 1st day of January, as the case may be, of the assessment year to the date of the furnishing of the return- (a) in the case of a registered firm or an unregistered firm which has been assessed under Clause (b) of Section 183, on the amount of tax which would have been payable if the firm had been assessed as an unregistered firm, and (b) in any other case, on the amount of tax payable on the total income, reduced by the advance tax, if any, paid or by any tax deducted at source, as the case may be.

139. (8) Notwithstanding anything contained in Clause (iii) of the proviso to Sub-section (1), the Income-tax Officer may, in such cases and under such circumstances as may be prescribed, reduce or waive the interest payable by any person under any provision of this section.

[It may be added that in Clause (Hi) of the proviso to Section 139(1), 'nine per cent,' had been substituted for 'six per cent' by the Taxation Laws (Amendment) Act, 1967 with effect from 1-10-1976.] We would, therefore, treat the aforesaid impugned orders of the ITO under Section 154, in the matter of charging of interest under Section 139(8), to read as ones under Section 139(1) read with Section 139(8) as the said provisions stood in each of the years under consideration, prior to their amendments by the Taxation Laws (Amendment) Act, 1970 with effect from 1-4-1971. This view of ourselves finds support from the ratio of the decision of the Supreme Court in the case of L. Hazari mal Kuthiala v. ITO [1961] 41 ITR 12.

14. Having come to the above conclusion, the next point for our consideration is as to whether the mistake in the matter of non-charging of interest under Section 139(1) read with Section 139(8) of the Act as reproduced in para 13 above by the ITO in the original assessments for the years under consideration, is a mistake apparent from record. We after hearing both the learned counsel for the assessee, Shri O.P. Vaish, and the departmental representative, find that a similar question had come up for consideration of the Allahabad High Court in the case of Raja Hari Chand Raj Singh v. CIT [1978] 114 ITR 727, as is the position in the present cases for charging of interest for delayed submission of the returns by the assessee for each of the assessment years 1965-66 to 1970-71. Therein, the Allahabad High Court after referring to the decision of the Supreme Court in T.S.Balaram, ITO v. Volkart Brothers [1971] 82 ITR 50, has laid down that the question whether under Section 139(1) interest was chargeable for delayed submission of the return by the assessee, when he had not applied for extension of time, is one on which there is a serious difference of opinion between the various High Courts. Therefore, it cannot be said that there was an error apparent from the record where the ITO charged interest even though the assessee had not applied for extension of time for filing the return and the assessee cannot seek rectification of the assessment under Section 154. The ratio of this decision squarely applies in the present cases. The assessee filed delayed returns for each of the assessment years 1965-66 to 1970-71. He had not applied for extension of time. The ITO at the time of completing the original assessments did not charge any interest under Section 139(1), as it then stood. The ITO cannot, when the assessee had not applied for extension of time in the matter of filing of the returns for each of the said years, charge interest under Section 139(1) by taking recourse to Section 154. The impugned orders of the ITO under Section 154, in the matter of charging of interest under Section 139(1) were, therefore, bad in the eyes of law.

15. Coming to the impugned orders by the ITO under Section 154, to charge interest under Section 217, for the assessment years 1965-66, 1966-67 and 1967-68, 1973-74 and 1974-75, we find after hearing both the sides that similar question had come up for consideration of the Tribunal (Calcutta Bench 'E') in IT Appeal No. 1334 (Cal.) of 1975-76, decided on 6-8-1976, reported as 1977 ITC (V)-366, and the Tribunal after taking note of the aforesaid decision of the Supreme Court in the case of Volkart Brothers (supra) had held that the rectification order in the matter of charging of interest under Section 217 was bad, there being no mistake apparent from the record. We have perused the aforesaid earlier order of the Tribunal. For the reasons stated therein, we agree, and we hold likewise. We may add that the proceedings, which led to the original assessments made by the ITO, for the said years were completed after initiating proceedings under Section 147(1)(b) read with Section 148.

16. Before we part, we would like-to record that both the learned counsel for the assessee Shri O.P. Vaish and the departmental representative had advanced several other arguments regarding the conclusion arrived at by the ITO that the present case was a case of mistake apparent from the record, inasmuch as the assessee could not have had advantage of the provisions of the Voluntary Disclosure Ordinance, 1975 in the matter of immunity available to the assessee, in the matter of non-charging of the aforesaid interest and the initiation of penalty proceedings. We, in view of our above conclusion, are not dealing with those arguments.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //