High Court Of Kerala
Season Rubber Ltd. vs. CIT
Sections 246
Asst. Year 1986-87
G. Sivarajan & K. Balakrishnan Nair, JJ.
IT Appeal No. 148 of 2000
7th October, 2002
Counsel Appeared
John Ramesh K.I. John, for the Appellant : P.K.R. Menon, for the Respondent
JUDGMENT
BY THE COURT :
The appellant is a company, incorporated under the Companies Act, and is engaged in the business of manufacture of centrifuged latex. The assessment of the appellant under the IT Act for the year 1986-87 was originally completed on 15th March, 1989, in which the AO levied a sum of Rs. 16,615 as interest under s. 139(8) and a sum of Rs. 1,32,309 as interest under s. 215 of the IT Act, 1961. The appellant took up the assessment order in appeal before the CIT(A), who granted relief to the appellant. The AO gave effect to the appellate order in which interest under s. 139(8) Rs. 8,805 and interest under s. 215 Rs. 63,813 were levied. The appellant filed a petition for waiver of the interest levied under s. 139(8) and also under s. 215 of the Act before the CIT under s. 264 of the Act. The CIT, as per order dt. 22nd July, 1994, waived the interest levied under s. 139(8), but declined to grant waiver of the interest levied under s. 215. Regarding the levy of interest under s. 215 of the Act, the CIT observed as follows : “As regards interest levied under s. 215, it is seen that an order of the Tribunal for the asst. yr. 1986-87 allowing relief to the assessee as regards the claim for depreciation has been issued and on giving effect to the same the assessee will be entitled to substantial relief as regards interest levied under s. 215. The AO is directed to verify the order of the Tribunal and give effect to the same immediately so as to correctly quantify the reduced interest under s. 215.” Pursuant to the direction issued by the CIT in the said order, the AO gave effect to the Tribunal’s order giving further relief. The order of the CIT was also given effect to by the AO as per order dt. 17th Nov., 1994, in which interest of Rs. 28,847 was levied under s. 215 of the Act. The appellant, being aggrieved by the aforesaid levy of interest, filed an appeal before the CIT(A), who, by his order dt. 27th March, 1996, allowed the appeal directing the deletion of the interest levied under s. 215 of the Act. In appeal by the Department, the Tribunal cancelled the order of the first appellate authority by holding that no appeal will lie against the levy of interest under s. 215 of the Act and restored the order of the assessing authority.
2. Shri John Ramesh, learned counsel for the appellant, submits that though the assessee had filed a revision under s. 264 of the IT Act for waiver of the interest levied under ss. 139(8) and 215 of the Act, the CIT had considered only the waiver of interest under s. 139(8) and left open the matter in regard to the levy of interest under s. 215 for consideration by the AO. The counsel further submits that the Tribunal was not justified in holding that no appeal will lie against the levy of interest under s. 215 made by the assessing authority. He, in support of the above, relied on the decisions of the Karnataka High Court in CIT vs. H.H. Rajkuverba Dowager Maharani Saheb (1978) 115 ITR 301 (Kar) and of the Calcutta High Court in CIT vs. Lalit Prasad Rohini Kumar (1979) 117 ITR 603 (Cal) and the decision of the Honourable Supreme Court in Central Provinces Manganese Ore Co. Ltd. vs. CIT (1986) 58 CTR (SC) 112 : (1986) 160 ITR 961 (SC). On the basis of the aforesaid decisions, he submits that the Tribunal had acted illegally in setting aside the order of the CIT(A).
3. Shri P.K.R. Menon, learned senior Central Government standing counsel for the Revenue, on the other hand, submits that the appellant, by filing a petition under s. 264 for waiver of the interest, had admitted his liability to pay interest under ss. 139(8) and 215. He also submits that the appellant had only sought for waiver/reduction of the interest levied under the aforesaid two sections as provided under ss. 139(8) and 215 r/w rr. 117A and 40, respectively of the IT Rules. The senior counsel further submits that since the CIT had declined to grant relief of waiver of the interest levied under s. 215 of the Act, the AO, while giving effect to the order of the Tribunal and the order of the CIT, had no jurisdiction to consider the question regarding the validity of the levy of interest under s. 215 of the Act. Admittedly, the appellant did not challenge the levy of interest under s. 215 of the Act made in the original assessment order. It is only against the revised order giving effect for the first appellate order the appellant had chosen to file a revision under s. 264 of the IT Act r/w r. 40 of the Rules, seeking for waiver of the interest. We find from the order of the CIT that the CIT has specifically noted the contention of the appellant regarding the waiver of interest as follows : “As regards interest under s. 215, the assessee’s representative stated that the return having been filed on 17th Dec., 1986, and the assessment having been completed vide order dt.
15th March, 1989, and the delay in the completion of the assessment not being attributable to the assessee, the waiver of interest under s. 215 may be sympathetically considered.” We also find that the CIT has observed in that context that by giving effect to the order of the Tribunal, the assessee will get substantial relief as regards interest levied under s. 215 of the Act. From the above, it is clear that the CIT had declined to grant the relief in regard to the levy of interest under s. 215 of the Act to the appellant. It is true, that the CIT has directed the AO to verify the order of the Tribunal and give effect to the same immediately so as to correctly quantify the interest levied under s. 215. It is by virtue of the above direction as also the direction contained in the appellate order of the Tribunal that the AO had passed the order dt. 17th Nov., 1994, wherein interest under s. 215 was fixed at Rs. 28,847 as against the interest of Rs. 1,32,315 levied by the AO originally and the sum of Rs. 63,813 fixed in the revised order giving effect to the first appellate order. The appellant had chosen to file an appeal against the levy of the reduced interest of Rs. 28,847 before the first appellate authority. According to us, the appellate authority had acted illegally in directing the AO to waive the interest levied under s. 215 without noticing the fact that the CIT has declined to grant the said relief. According to us had the first appellate authority noticed the order of the CIT passed under s. 264 of the Act r/w r. 40 of the Rules, he would not have entertained the appeal at all. The Tribunal, according to us, has rightly cancelled the order of the first appellate authority by holding that in view of the order passed by the CIT under s. 264 of the Act, no appeal will lie against an order passed by the AO giving effect to the appellate order and the consequential reduction of interest under s. 215.
4. The decisions of the Supreme Court and of the High Courts relied on by the counsel for the assessee have no relevance on the facts of the case on hand. The appellant had applied before the CIT for waiver/reduction of the interest levied under s. 215 which was declined. In the above circumstances, there is no question of filing any appeal against the order giving effect to the directions issued by the CIT in the revision order for the very same relief. The CIT(A) had no jurisdiction to entertain such an appeal. We do not find any merit in this appeal. It is accordingly dismissed.
[Citation : 263 ITR 385]
