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Commissioner of Income-tax Vs. Dalmia Dairy Industries Ltd. - Court Judgment

LegalCrystal Citation
Subject Direct Taxation
CourtDelhi High Court
Decided On
Case NumberIncome-tax Case No. 168 of 1982
Judge
Reported in[1986]159ITR33(Delhi)
ActsIncome Tax Act, 1961 - Sections 256(1)
AppellantCommissioner of Income-tax
RespondentDalmia Dairy Industries Ltd.
Excerpt:
- - this factual position would certainly be known to the tribunal as well as to both the counsel who argued the appeal......officer had waived the penal interest for all but one year. when an appeal was taken before the appellate assistant commissioner, certain directions were given regarding this penal interest but complete waiver, as sought for by the assessed, was not granted. then an appeal was taken to the tribunal which was decided on january 11, 1980. as regards the question of penal interest, there was a specific ground raised by the assessed. at the hearing of the appeal, a preliminary objection was taken regarding this ground by the learned counsel for the department claiming that the interest order passed under section 215 by the income-tax officer was not appealable to the appellate assistant commissioner. several cases were cited before the tribunal and the tribunal eventually held that the.....
Judgment:

D.K. Kapur, J.

1. The questions of law sought to be raised in this petition are said to arise out of the order of the Tribunal dated October 10, 1980. The facts of the case are that the assessed had contested the levy of penal interest under section 215 of the Income-tax Act, 1961, before the Income-tax Officer. The Income-tax Officer had waived the penal interest for all but one year. When an appeal was taken before the Appellate Assistant Commissioner, certain directions were given regarding this penal interest but complete waiver, as sought for by the assessed, was not granted. Then an appeal was taken to the Tribunal which was decided on January 11, 1980. As regards the question of penal interest, there was a specific ground raised by the assessed. At the hearing of the appeal, a preliminary objection was taken regarding this ground by the learned counsel for the Department claiming that the interest order passed under section 215 by the Income-tax Officer was not appealable to the Appellate Assistant Commissioner. Several cases were cited before the Tribunal and the Tribunal eventually held that the question could be raised in such an appeal if other questions on the merits of the assessment were also raised. The Tribunal did not say anything on the merits as to whether the interest was to be waived or not, but merely affirmed the order of the Appellate Assistant Commissioner.

2. Later on, an application for rectification was moved stating that the counsel had not argued the question of penal interest on merits under the assumption that the preliminary objection was to be dealt with and this was a mistake. The learned counsel for the Revenue also affirmed that the question of penal interest was not argued on merits. This led to the order rectifying the initial order. The question regarding the penal interest was remitted for a decision to the Appellate Assistant Commissioner to be decided on merits.

3. It may here be mentioned that the assessed had also filed a reference application against the order dated January 11, 1980, but on rectification being granted, this reference application became infructuous.

4. In its order under section 256(1), the Tribunal has held that the first question proposed was not a question of law and the second question could not be referred, because no reference had been sought by the Department against the order dated January 11, 1980, where it had been held that the question of penal interest could be argued before the Appellate Assistant Commissioner.

5. Mr. Wadhera urged that, in fact, the Tribunal had altered its original order by rectifying the sane. According to him, the original order had affirmed the order of the Appellate Assistant Commissioner and so there was no ground for rectifying the same. The real controversy, thereforee, is whether the Tribunal merely held that the Appellate Assistant Commissioner had the power to hear the appeal on the question of penal interest or did the Tribunal hold that the order of the Appellate Assistant Commissioner was correct on merits As the application for rectification was based on the claim that the penal interest question was not argued on merits and the facts were not disputed by the counsel for the Revenue and this position was also accepted by the Tribunal, it seems to us that the question whether there was a mistake or not really depended on the events that occurred during the hearing of the appeal.

6. The Tribunal certainly seems to have proceeded on the basis that it only dealt with the preliminary objection and not with the merits of the ground relating to the penal interest. This factual position would certainly be known to the Tribunal as well as to both the counsel who argued the appeal. As it was conceded by the counsel for the Revenue, we do not see how it can be a question of law. The application is dismissed. No costs.


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