COMMISSIONER OF INCOME TAX SHIMLA Vs. RUCHIRA PAPERS LTD. KALA AMB DISTT SIRMOUR THROUGH ITS MANAGING DIRECTOR

JUDGEMENT

(1.) This appeal was admitted on the following questions of law:-

(2.) The facts, briefly stated, are that for the assessment year 1996-97 i.e. accounting period 1.4.1995 to 31.3.1996 the assessee filed its return of income declaring income of Rs. 1,31,40,450. This return was accepted by the revenue on 17.12.1996. Thereafter, a revised return of income was filed by the assessee on 17.2.1997 showing income of Rs. 1,29,43,000. The reason for filing the revised claim was that some depreciation, which had not been claimed earlier, was claimed. On 28.02.1997 the Assessing Officer passed assessment order accepting the income at Rs. 1,29,94,000. Thereafter, a notice was issued to the assessee under section 154 asking why the deduction granted to it under section 80I in respect of the second unit of the assessee be not withdrawn. On 14.12.1998 an order under section 154 was passed and thereafter matter was taken in appeal and the Commissioner (Appeals) set-aside the order issued under section 154. An appeal was filed by the revenue before the Tribunal, which was also rejected. In the meantime on 29.10.2001 an order under section 143(3) read with Section 147 was passed which also did not levy any interest under sections 234B or 234C. On 12.11.2003 fresh order under section 154 read with Section 254 was passed wherein the income was assessed at Rs. 1,50,89,090. Again there was no mention that any interest would be charged. Thereafter, the assessee filed an application for rectification and claimed further depreciation and this application was allowed on 31.12.2003 and the income for the assessment year 1996-97 was now assessed at Rs. 1,49,33,180. It is not disputed that this is the final assessment order. The order dated 31.12.2003 is also completely silent with regard to the payment of interest. However, the department while raising the demand directed that interest be also paid under sections 234A and 234B. Application for rectification filed under section 154 by the assessee praying that the interest could not be charged since in none of the assessment orders, whether original or on reassessment, there was any order of payment of interest, was rejected. Thereafter, the assessee filed an appeal before the Commissioner of Income-tax, who allowed the same. The Tribunal has rejected the appeal of the revenue and hence this appeal.

(3.) Sh. Vinay Kuthiala, learned senior counsel appearing for the revenue has placed reliance on the judgment of the Apex Court in CIT v. Anjum M.H. Ghaswala, 2001 252 ITR 1 , which has clearly laid down that the levy of interest is mandatory.