COMMISSIONER OF INCOME TAX Vs. SANDEEP KHANNA

JUDGEMENT

(1.) BY means of this IT reference, the following questions have been referred for the opinion of this Court : "(i) Whether on the facts and in the circumstances of the case, the Tribunal was right in law in coming to the conclusion that in revision order passed under s. 154/155, for charging interest under ss. 139(8) and 215 the application of the provisions of s. 154(3) are mandatory, when in notice issued under s. 154/155 it has been specifically made clear that the enhancement of income will also increase the assessee's liability. (ii) Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in entertaining the assessee's appeal against charging of interest under ss. 139(8) and 215 in order passed under s. 154, when the assessee had not challenged the enhancement of income which has made assessee liable to pay interest."

(2.) IT would be pertinent to mention that the assessee is a partner in the firm M/s Kailash Nath and Associates, New Delhi. His assessment under s. 143(1) of the IT Act, 1961 (hereinafter referred to as the 'Act') was provisionally completed by taking into consideration the share from the two firms subject to rectification under s. 154/155 of the Act on completion of assessment of the said firms. Subsequently the AO with a view to take into consideration the share of the assessee's assessed income. Interest was also levied under ss. 139(8) and 215/217 of the Act.

(3.) THE assessee was only aggrieved by the levy of interest and aggrieved by the same filed an appeal before the CIT(A), Shimla. He challenged the levy of interest on the ground that the same was not chargeable without issuance of notice. The CIT(A) allowed the appeal of the assessee and held that the AO was not justified in charging interest and the same was ordered to be deleted.