Commissioner of Income-tax Vs. Smt. Anita Ghosh - Court Judgment

Excerpt:
- ajit k. sengupta, j.1. in this reference made at the instance of the revenue, the following question has been raised by the tribunal under section 256(1) of the income-tax act, 1961, for the opinion of this court :'whether, on the facts and in the circumstances of the case, interest under section 215 of the income-tax act, 1961, requires to be computed up to the date of assessment under section 143(1) or the assessment made under section 143(3) of the act ?'2. this reference relates to the income-tax assessment of the assessee-company for the assessment year 1979-80. the facts as found by the tribunal are as under :the original assessment of the assessee was completed on december 26, 1979, under section 143(1) of the income-tax act, 1961, on the returned income of rs. 44,010. the assessee objected to the original assessment by filing an application in form no. 6a. in view of the assessee's objection, the income-tax officer issued notice under sub-section (2) of section 143 of the said act and a fresh assessment was thereafter completed under subsection (3) of section 143 on july 17, 1982, on a total income of rs. 1,04,020.3. in making this regular assessment, the income-tax officer charged interest under section 215 of the said act for the shortfall in the payment of advance tax. this interest was charged for the period april 1, 1979, to june 30, 1982, inasmuch as the assessment under sub-section (3) of section 143 was completed on july 17, 1982. the assessee filed an appeal against the assessment to the commissioner of income-tax (appeals)-x, calcutta, but did not raise any issue regarding charge of interest. when the quantum appeal was dismissed by the commissioner of income-tax (appeals), the assessee filed a second appeal to the income-tax appellate tribunal, but in this appeal also, levy of interest under section 215 from april 1, 1979, to june 30, 1982, was not challenged.4. the assessee, however, made an application to the income-tax officer under section 154 of the said act contending, inter alia, that interest under section 215 was erroneously levied for the entire period of april 1, 1979, to june 30, 1982. in this application, the assessee contended that the assessment made earlier under section 143(1) on december 26, 1979, was also a regular assessment within the meaning of section 2(40) of the said act and, therefore, according to the assessee, interest could not be charged up to june 30, 1982. the income-tax officer rejected the assessee's said application under section 154. on further appeal, the commissioner of income-tax (appeals) also held that there was no mistake apparent from the record in charging interest under section 215 from april 1, 1979, to june 30, 1982. on further appeal, the tribunal, however, held that section 2(40) of the act which defines the expression 'regular assessment' does not make a distinction between an assessment made under sub-section (1) of section 143 and the assessment made under sub-section (3) of section 143.5. according to the tribunal, it was fair to hold that an assessment made under section 143(1) was also a regular assessment. the tribunal also observed that, if there was any doubt or ambiguity in the provisions of any section of a taxing statute, it was well-settled that the benefit should go to the assessee. the tribunal, accordingly, directed that the interest charged under section 215 should be recomputed from april 1, 1979, to the date of first assessment made under section 143(1), that is to say, up to december 26, 1979, and not up to 30th june, 1982.6. on these facts, the aforesaid question has been referred by the tribunal for the opinion of this court.7. sub-section (1) of section 143 as it stood at the relevant time enabled the income-tax officer to make assessment of the total income of an assessee without requiring his presence or the production by him of any evidence in support of the return. in this case, this assessment was duly made on december 26, 1975, accepting the returned income of rs. 44,010. we find that the assessee did not accept the said assessment. in fact, she objected to the said assessment by making an application to the income-tax officer in form no. 6a prescribed under rule 14b of the income-tax rules, 1962, pursuant to section 143(2)(a) of the said act. when an assessee objects to the assessment by making an application as aforesaid, sub-section (2) of section 143 clearly provides that the income-tax officer has no option but to serve a notice on the assessee requiring him to attend the office of the income-tax officer and to produce or cause to be there produced any evidence on which the assessee may rely in support of the return. the second proviso to section 143(2) of the said act further provides that, in a case where the assessment made under sub-section (1) of section 143 is objected to by the assessee by an application under clause (a) of sub-section (2) thereof, the assessee shall not be deemed to be in default in respect of the whole or any part of the amount of the tax demanded in pursuance of the assessment under sub-section (i), which is disputed by the assessee and further no interest shall be chargeable under sub-section (2) of section 220 in respect of such disputed amount. sub-section (3) of section 143 further provides that after hearing such evidence as the income-tax officer may require on specified points and after taking into account all relevant material which he has gathered, the income-tax officer shall, by an order in writing, make a fresh assessment of the total income or loss of the assessee and determine the sum payable by him or refundable to him on the basis of such assessment.8. clause (40) of section 2 of the said act contains the definition of the expression 'regular assessment' to mean the assessment made under section 143 or section 144. in other words, the assessments made under sub-section (1) of section 143 as well as under sub-section (3) of section 143 are both regular assessments within the meaning of section 2(40).9. but we have to understand the meaning of the expression 'regular assessment' in the context of section 215 of the said act. this section provides for levy of interest upon the assessee when there is a shortfall in payment of advance tax. for the purpose of calculating such interest, section 215 requires determination of two things, one being the assessed tax and the other the period for which such interest is payable by the assessee. sub-section (5) of section 215 defines the expression 'assessed tax' to mean the tax determined on the basis of the regular assessment as reduced by the taxes deducted at source. sub-section (1) of section 215 lays down that interest is payable by the assessee at 12 per cent. per annum on the amount by which the advance tax paid by him falls short of the assessed tax and such interest is payable for the period from the 1st day of april next following the relevant financial year up to the date of regular assessment. in other words, the figure of assessed tax is also required to be taken with reference to the regular assessment.10. in this view of the matter, if the regular assessment in this case is taken to be the order passed under sub-section (1) of section 143, which was passed on december 26, 1979, even the figure of assessed tax will have to be taken as determined in that order. but this, in our opinion, will be totally erroneous, since the assessment made under section 143(1) automatically stands set aside once the assessee makes an application objecting to such assessment in form no. 6a as laid down under clause (a) of sub-section (2) of section 143. if the figure of assessed tax is taken as per the subsequent order dated july 17, 1982, there is no logic for restricting the period for calculation of interest up to the first order dated december 26, 1979, for the purpose of charging interest under section 215.11. as is now well-settled, we must make a harmonious construction of different sections of the statute. the purpose and objective of section 215 is to enable the income-tax officer to charge interest for short payment of advance tax as compared to the assessed tax. once an assessee makes an application in form no. 6a objecting to the assessment made under section 143(1) of the said act, the income-tax officer has no option but to make a fresh assessment after giving proper opportunity to the assessee and after making such enquiries as may be necessary. in our view, the fresh assessment so made is the only regular assessment which is relevant for the purposes of section 215 of the said act.12. in this view of the matter, we are of the opinion that the tribunal was clearly wrong in holding that interest under section 215 should be charged only up to december 26, 1979. in our opinion, the interest is chargeable on the assessed tax as determined in the regular assessment order passed on july 17, 1982, and such interest is to be calculated for the period from april 1, 1979, to june 30, 1982. even otherwise, we find that the assessee claimed relief in this case through a petition under section 154 of the said act. an issue which is debatable can never be rectified under section 154. even on this score, the contentions of the assessee must fail. but, as we have already held, the correct view would be that the interest in this case is chargeable on the assessed tax as determined in the regular assessment of the assessee made on july 17, 1982, under section 143(3) of the said act for the period from april 1, 1979, to june 30, 1982. in our view, this is the only interpretation which is possible on a harmonious construction of section 2(40) read with section 215 of the said act. as such, the income-tax officer was fully justified in rejecting the assessee's application made under section 154.13. we accordingly answer the question referred to this court by saying that interest under section 215 is required to be computed up to the date of assessment made under section 143(3) of the said act and not up to the date of assessment made under section 143(1).14. the question is answered accordingly in favour of the revenue. there will be no order as to costs.shyamal kumar sen, j.15. i agree.