LAWS(DLH)-1998-1-4

ASHOK KUMAR Vs. COMMISSIONER OF INCOME TAX

Decided On January 07, 1998
ASHOK KUMAR Appellant
V/S
COMMISSIONER OF INCOME TAX Respondents

JUDGEMENT

(1.) This is a reference under Section 256(1) of the Income-tax Act, 1961 made at the instance of the assessee, arising out of the assessment year 1971- 72 seeking opinion of the High Court on the following question of law :

(2.) Assessment was framed under Section 143(3) of the Income-tax Act, 1961 by the Income Tax Officer on 23.3.1974. Taxable income of the assessee was computed and the tax was levied. It appears that there was a delay in filing theReturn and also a delay in filing the statement of advance tax. By the same order of assessment, the Income Tax Officer also directed charging of interest under Sections 139(1) and 217(1)(a).

(3.) The Assessee preferred an appeal before the Appellate Assistant Commissioner of Income Tax. Not only the order of assessment was challenged disputing the computation of the income and consequently the quantum of tax, the levy of interest under Sections 139(1) and 217(1)(a) was also challenged. On behalf of the department an objection was raised to the maintainability of the appeal insofar as the levy of interest was concerned. The learned AAC formed an opinion that inasmuch as challenge to the levy of interest was taken up as a ground of appeal alongwith other grounds, the appeal was maintainable. The learned ACC also formed an opinion that the levy of interest under Section 139 as also under Section 217was not preceded by notice to the assessee which amounted to violation of the principles of natural justice and therefore, the levy of such interest was bad. The appeal was allowed resulting not only in to interference with the quantum of income assessed but also in a direction to the Income Tax Officer for giving reasonable opportunity to the assessee to show cause and plead why such interest should not be levied or the amount levied should bs reduced.