COMMISSIONER OF INCOME TAX Vs. DEVICHAND PAN MAL

JUDGEMENT

(1.) AT the instance of the Commissioner of Income-tax, Jodhpur, the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur ("the Tribunal" herein), has referred the following questions for our opinion, which arise out of its order dated June 30, 1978, passed in Income-tax Application No. 375/JP/76-77 :

(2.) THE assessee is a partnership concern. THE assessment year under consideration is 1971-72. For this assessment year, the return of income was filed initially on March 23, 1972. In this return, the income declared was Rs. 1,12,370. A revised return was filed on January 19, 1974 claiming deduction under Section 80J of the Income-tax Act, 1961 (Act No. XLIII of 1961) (for short " the Act"). THE asscssee had claimed registration. THE Income-tax Officer, however, refused the registration by a separate order passed under Section 185 of the Act. He made the assessment of the assessee in the status of an unregistered firm by an assessment order dated January 9, 1975. THE income determined was Rs. 94,535. In the appeal, the Appellate Assistant Commissioner (AAC) assessed the income at Rs. 81,020. THE tax payable on this amount as a registered firm was Rs. 7,685. THE assessee-firm had already paid advance tax of Rs. 10,000 on October 9, 1970, being a person not hitherto assessed in terms of Section 212(3) of the Act. THE Income-tax Officer (ITO), however, stated in the assessment order "charge interest as per the Rules". Interest to the tune of Rs. 16,970 was charged. An appeal was lodged by the assessee against the assessment order passed under Section 143(3) of the Act. One of the grounds taken was that the Income-tax Officer erred in levying interest amounting to Rs. 16,970 under Section 215 of the Act. THE Appellate Assistant Commissioner in his order dated March 18, 1976, held that the interest was correctly charged ; however, the amount of interest chargeable may be re-calculated on the basis of the reduced income. While dealing Math the question of interest, the Appellate Assistant Commissioner observed as under :

(3.) WE take up question No. 1 first.