These two appeals are directed against the common order passed by the CIT (A)-VI, Hyderabad, dated 15-9-2003, and they pertain to the assessment years 1989-90 and 1990-91. The facts concerning the issue in dispute are stated in brief as follows.
Consequent to search and seizure proceedings, certain IVPs were retained by the tax authorities and assessment was completed accordingly. However, on account of relief granted by the appellate authority, consequential orders were passed on 12-3-2003, by the assessing officer, wherein interest payable to the assessee under section 132B(4) was calculated for the period February, 1994 to March, 1998 (for the assessment year 1989-90) and May/September, 1994 to March, 1998 (for the assessment year 1990-91). The case of the assessee is that under section 132B(4) of the Income Tax Act, 1961, interest is payable upto March, 2003, since the consequential order was passed in March, 2003.
Before the CIT (A), it was contended that the consequential order passed by the assessing officer is also an assessment order and that interest has to be calculated upto the date of passing the assessment order. In this regard, the assessee relied upon the decision of the Hon'ble Andhra Pradesh High Court in the case of Bakelite Hylam Ltd. v.CIT (1988) 171 ITR 344 (AP), wherein the court observed as follows : "The order passed by the Income Tax Officer giving effect to the decision of the appellate authority is as much an assessment order as the one passed by him by way of regular assessment under section 143 of the Act." "132B(4)(a) The Central Government shall pay simple interest at the rate of fifteen per cent per annurn on the amount by which the aggregate of money retained under section 132 and of the proceeds, if any, of the assets sold towards the discharge of the existing liability referred to in clause (i) of sub-section (1) of this section.
(b) Such interest shall run from the date immediately following the expiry of the period of six months from the date of the order under sub-section (5) of section 132 to the date of the regular assessment or reassessment referred to in clause (i) of sub-section (1), or, as the case may be, to the date of last of such assessments or reassessments." The first appellate authority observed that the decision of the Andhra Pradesh High Court (supra) has no application to the facts of the instant case inasmuch as the observations therein were made in a different context; the judgment was rendered to say that a consequential order passed by the assessing officer to give effect to an appellate order is an appealable order. The CIT (A) referred to the decision of the Hon'ble Supreme Court in the case of Modi Industries Ltd. v. CIT (1995) 216 ITR 759 (SC) to hold that the interest is payable only upto the date of passing the first order of assessment.
The Apex Court observed that the expression 'regular assessment' has been used in the statute in no other sense than the first order of assessment passed under section 143 or section 144. Since section 132B(4)(b) used the expression 'regular assessment', the learned CIT (A) concluded that the interest is not payable upto the date of passing of the consequential order inasmuch as a consequential order may fall within the meaning of the term 'assessment' but not 'regular assessment'.
Further aggrieved, the assessee is in appeal before us. The learned counsel, appearing on behalf of the assessee, submitted that apart from the decision of the Hon'ble Jurisdictional High Court in the case of Bakelite Hylam Ltd. (supra), the Apex Court in the case of S. Sankappa & Ors. v. ITO (1968) 68 ITR 760 (SC), observed that rectification order passed by the assessing officer would also fall within the expression assessment'. It was submitted that the decision of the Apex Court in the case of S. Sankappa & Ors. (supra) was not referred to by the later Bench of the Supreme Court in the case of Modi Industries Ltd. (supra).
In other words, there is no conflict of opinion with regard to the issue as to whether consequential order passed by an assessing officer can be considered as assessment. The learned counsel adverted our attention to section 132B(4)(b) of the Act to submit that the interest is payable from the date of order under section 132(5) to the date of regular assessment or reassessment or to the date of last of such assessments. In the instant case, the consequential order passed on 12-3-2003, has to be taken into consideration inasmuch as the interest is payable upto the date of 'last of such assessments'. He has also referred to section 2(40) and also section 2(0) of the Act to submit that the definitions in the section do not make any distinction between the first assessment order and the last assessment order.
On the other hand, the learned Departmental Representative strongly relied on the order passed by the first appellate authority. He submitted that the expression regular assessment' means the first order of assessment and thus interest is payable only upto March, 1998.
We have carefully considered the rival submissions and perused the record. A plain reading of section 132B(4)(b) of the Act indicates that the legislature has prescribed alternative modes of computation of interest, i.e., (1) interest shall run from the date of order under section 132(5) to the date of regular assessment or reassessment, or (2) from the date of order under section 132(5) to the date of last of such assessments or reassessments. In the second part of the clause, the legislature has used the expression 'assessment' in contradiction to the expression 'regular assessment' used elsewhere, which indicates that if more than one order is passed by the assessing officer, interest is payable upto the date of last of such assessments. Under these circumstances, we are of the view that the claim of the assessee deserves to be accepted. The assessing officer is directed accordingly.