COMMISSIONER OF INCOME-TAX Vs. HIMALAYA DRUG CO

JUDGEMENT

(1.) The Income-tax Appellate, Delhi Bench-B (hereafter "the Tribunal"), has made this reference under Section 256(1) of the I.T. Act, 1961. The question referred is :

(2.) On appeal, the AAC cancelled this order, the reasons being that there was no order passed by the ITO in the first instance to show how the amount of Rs. 382 as interest had been calculated. If calculation had proceeded on the basis of the tax payable by a registered firm, then the amount of interest charged should have been Rs. 463 from which fact it could be inferred that the ITO had in his discretion reduced the amount of interest chargeable. Another reason given was that the previous approval of the IAC was required to be obtained since the amount of interest chargeable exceeded Rs. 1,000 on the tax payable by the assessee if treated as an unregistered firm. No such prior approval had been taken and hence it could not be said that there was any mistake apparent from the record. Lastly, in the opinion of the AAC, a decision on a debatable point of law or failure to apply the law to a set of facts which remained to be investigated cannot be corrected by an order under Section 154.

(3.) Aggrieved, the department filed an appeal before the Tribunal. The Tribunal repelled the contention of the revenue that the tax calculation form known as ITNS-150 could be treated as an order charging interest which could be corrected under Section 154 of the Act. As observed by the Tribunal: "In our view this is a tax calculation form meant purely for departmental purposes and hence cannot be equated with an order of the ITO, such as an assessment order or any other order, by which the assessee is made liable to pay a sum by way of interest, penalty or tax." The Tribunal has also taken the view that even the levy of interest at Rs. 382 on the basis of the tax payable by the assessee as a registered firm was not correct. The correct amount should have been Rs. 463 and from this fact it could be inferred that there was no ascertainable basis or an order for charging interest at Rs. 382. In the result, the department's appeal was dismissed.