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Satishchand Sanghi Vs. Income-tax Officer - Court Judgment

LegalCrystal Citation
CourtIncome Tax Appellate Tribunal ITAT Indore
Decided On
Judge
Reported in(1985)13ITD542Indore
AppellantSatishchand Sanghi
Respondentincome-tax Officer
Excerpt:
.....a refund of rs. 1,405 (income-tax rs. 1,171 and surcharge rs. 234) was issued to the assessee. the assessee appealed to the aac claiming that interest under sections 214 and 244(1a) of the act should have been allowed to him. the learned aac held that since the quantum of the income assessed was not challenged, the appeal on the mere question of interest was not maintainable, in view of the ruling in cit v. lalit prasad rohini kumar [1979] 117 itr 603 (cal.). the appeal was, accordingly, dismissed and the assessee is before us in appeal.3. we have heard the learned counsel for the assessee and the learned departmental representative. the learned counsel contended that the order passed by the ito revising the share income from the firm is an order under section 154 and an appeal lies.....
Judgment:
1. This is an assessee's appeal against the order of the learned AAC for the assessment year 1980-81 holding that the appeal filed by the assessee against an order under Section 154 of the Income-tax Act, 1961 ('the Act') was not maintainable.

2. The facts are that the assessee is a partner in a firm, Rajputana Motors. The original assessment under Section 143(3) of the Act was completed taking the share income from the said firm as declared by the assessee. After the assessment of the partnership firm, the present assessee's assessment was revised by an order under Section 154 passed on 31-3-1983 resulting in a reduction of the assessee's income. As a result of the reduction, a refund of Rs. 1,405 (Income-tax Rs. 1,171 and surcharge Rs. 234) was issued to the assessee. The assessee appealed to the AAC claiming that interest under Sections 214 and 244(1A) of the Act should have been allowed to him. The learned AAC held that since the quantum of the income assessed was not challenged, the appeal on the mere question of interest was not maintainable, in view of the ruling in CIT v. Lalit Prasad Rohini Kumar [1979] 117 ITR 603 (Cal.). The appeal was, accordingly, dismissed and the assessee is before us in appeal.

3. We have heard the learned Counsel for the assessee and the learned departmental representative. The learned Counsel contended that the order passed by the ITO revising the share income from the firm is an order under Section 154 and an appeal lies against that order in terms of Section 246(1)(f) of the Act. This clause reads as under: 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 sections; The learned departmental representative, on the other hand, contended that an order passed under Section 155 of the Act is appealable in terms of the above clause only if it has the effect of enhancing the assessment or reducing a refund or if it is an order refusing to allow a claim made by the assessee under Section 154 or 155. According to the learned departmental representative the order in question merely determined the revised income of the assessee thereby reducing the taxable income and increasing the refund and, therefore, it was not appealable under the first part of the clause and that the second part of the clause did not come into play because the assessee had not made any claim before the ITO for the grant of interest under Section 214 or 244(1A) and no such claim was refused by the ITO.4. A copy of the impugned order would show that it does not touch the question of interest. It merely redetermines the total income at a lower figure as compared to the original assessment. The ITNS-150 that was served on the assessee along with the refund voucher for Rs. 1,405 is also silent about the interest. 'Refund' under the Act means a refund of the amount paid by the assessee earlier and is different from 'interest' allowable to an assessee on the amount refundable. The non-grant of interest under Sections 214 and 244(1A) in the ITNS-150, therefore, cannot be termed as the reduction of a refund so as to make the order which is otherwise absolutely silent on the issue, appealable.

5. The learned Counsel for the assessee relied upon an order of this Bench in Sharad Kumar Sanghi v. ITO [IT Appeal No. 786 (Indore) of 1983, dated 25-1-1985]. In that case, in an order passed under Section 154, the ITO charged interest under Section 215 of the Act, on the assessee and did not allow interest under Section 244(1A). Relying upon an earlier order dated 25-6-1985, in IT Appeal No. 1081 of 1981, the Tribunal held that the order under Section 154 was appealable. In that case interest under Section 217 of the Act was charged while passing an order under Section 154/155. The facts of those cases are, therefore, distinguishable. The ITO had created an additional liability on the assessee. As is evident from the facts of the present case mentioned above, no additional liability has been created against the assessee by the impugned order which is entirely in favour of the assessee. As regards the claim for interest, it was not made before the. ITO at that time and has been made subsequently, vide an application dated 20-5-1983. We are of the view that only when the assessee's claim made in the said application is refused by the ITO, the cause of action for an appeal could arise to the assessee. We agree with the learned AAC that the impugned order under Section 154 was not appealable and the present appeal has, accordingly, to be dismissed.


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