LAWS(KER)-2015-6-245

COMMISSIONER OF INCOME TAX, KANNUR Vs. MUTHAPPAN ENTERPRISES

Decided On June 12, 2015
Commissioner Of Income Tax, Kannur Appellant
V/S
Muthappan Enterprises Respondents

JUDGEMENT

(1.) This writ appeal is filed by the respondents in OP. 23177/02. The original petition was filed by the respondent herein, seeking to challenge Ext. P8 order passed by the first appellant under section 220(2A) of the Income-tax Act to the extent waiver of interest as provided therein was limited up to March, 1996. By the judgment under appeal, learned single Judge upheld the claim of the respondent and directed him entitled to the benefit of waiver of interest for the period up to the date provided for payment of tax under the revised order and demand issued on the basis of the Tribunal's order. It is this judgment which is under challenge before us. We heard learned senior standing counsel for the appellants and the learned senior counsel appearing for the respondent.

(2.) Briefly stated facts of the case are that the respondent was a firm engaged in the business of arrack. Though it was assessed as a "registered firm" in the previous years, for the assessment years 1991-92 and 1992-93, the respondent firm was assessed as "unregistered". The Commissioner of Income Tax (Appeals) allowed the appeal filed by the assessee and directed the Assessing Officer to allow registration to the assessee for both years. On a further appeal by the Revenue to the Tribunal, the order of the Commissioner was reversed and the order of the Assessing Officer was restored.

(3.) On the demand raised under section 143(3) of the Act, the assessee was made liable to pay interest under section 220(2). It was thereupon that the assessee filed petition under section 220(2A) for waiver of the interest demanded. In Ext. P8 order that was passed, the Commissioner took the view that though the appeal filed by the Department was decided by the Tribunal in its favour on 20.5.1998, the issue was already decided by this Court in Narayanan & Co. v. CIT, 1997 223 ITR 209 (Ker.) by judgment dated 14.3.1996. Accordingly, the Commissioner held that the pendency of the Department's appeal in the Tribunal against the assessee was only a procedural matter and therefore the assessee is entitled to waiver of interest only up to March, 1996, when Narayanan & Co. was decided. This view taken by the Commissioner was set aside by the learned single Judge, against which judgment, this appeal is filed.