COMMISSIONER OF INCOME TAX Vs. JAYENDRA H. KHARAWALA

JUDGEMENT

(1.) THE following question has been referred by the Tribunal, Ahmedabad Bench "C", under s. 256(1) of the IT Act, 1961 (the Act), at the instance of the CIT : "Whether the Tribunal is right in law and on facts in deleting the interest levied under s. 215 of the IT Act amounting to Rs. 1,56,970 - interest under ss. 139(8) and 215/217". The assessee carried the matter in appeal before CIT(A) who vide his order held that ground of appeal challenging the levy of interest under s. 139(8) of the Act was not entertained as the legality of the basis of levy had not been challenged as being incorrect.

(2.) HOWEVER , the CIT(A) upheld the submissions of the assessee that the assessee was not liable to be charged interest under s. 215 of the Act. It was held by CIT(A) that firstly, the assessee could not have anticipated the addition of income on the basis of assessments for asst. yrs. 1982 -83 and 1983 -84 being revised upwards under s. 263 of the Act, and secondly, in similar set of facts and circumstances in assessee's own case for asst. yr. 1985 -86, similar levy of interest under s. 215 of the Act was deleted. 1993, upheld the order of CIT(A). While doing so, the Tribunal took note of the fact that the order of CIT(A) for the immediately preceding assessment year, namely, asst. yr. 1985 -86, had been accepted by Revenue and no appeal had been preferred therefrom before the Tribunal. The Tribunal also accepted the findings of CIT(A) that, in the facts and circumstances of the case, the assessee could not have anticipated the additions in question considering the fact that the CIT had, while acting under s. 263 of the Act for earlier assessment years, namely, asst. yrs. 1982 -83 and 1983 -84,

(3.) MR . M.R. Bhatt, the learned senior standing counsel has been heard. Though served, there is no appearance on behalf of the respondent -assessee.