High Court Of Rajasthan : Jaipur Bench
Associated Stone Industries vs. CIT
Sections 37(1), 80VV, 216
Asst. Year 1982-83
Y.R. Meena & Shashi Kant Sharma, JJ.
DB IT Ref. No. 67 of 1986
30th July, 2002
Counsel Appeared
R.S. Mehta with Ms. Preet Sharma, for the Petitioner : J.K. Singhi, for the Respondent
JUDGMENT
BY THE COURT :
On an application filed under s. 256(2) of the IT Act, 1961, the Tribunal has referred the following questions for our opinion :
“Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in confirming the order of the CIT(A) by which he had restored the matter regarding levy of interest under s. 216 to the IAC for fresh consideration and rejecting the assessee’s additional ground raised in this behalf ?”
“Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the expenditure of Rs. 2,500 incurred by the assessee in the preparation of the income-tax return was covered by s. 80VV of the IT Act and, therefore, not allowable under s. 37 of the IT Act, 1961 ?”
2.The assessee filed the return of income on 22nd June, 1982, declaring total income of Rs. 84,66,140. Relevant assessment year is 1982-83. While making the assessment, AO charged the interest under s. 216 of the IT Act, 1961. In appeal before the CIT(A), CIT(A) took the view that as there was no speaking order, therefore, he restored the file to the IAC (Asst) i.e., AO. The assessee has not challenged this order of the CIT (A), but raised this ground before the Tribunal. Tribunal rejected this ground of the assessee and observed as under : “An additional ground was taken up before this Tribunal on 17th Nov., 1984, praying that the CIT (A) had instead of accepting the assessee’s submission that the levy of interest of Rs. 31,347 under s. 216 without passing a speaking order, had directed the IAC (Asst.) to pass a speaking order. In fact the order for levy of interest should have been cancelled together. This ground was never formally admitted by the Bench but at the time of hearing of this appeal, it was argued that the CIT(A)’s order in this behalf should be set aside. In the assessment order, a copy of which has been filed before us, there is a reference to the charging of interest though the reasons for that direction are not given. The CIT(A) has directed the assessing authorities to give reasons. No objection was raised to the order of the CIT(A) before us in the first instance. The objection even before the CIT(A) was that the IAC had erred in not giving any reason for charging of this interest. We, therefore, find no reason for allowing the assessee to take up this ground at this stage or any substance in this ground on merits which is hereby rejected.” Thereafter a miscellaneous application was filed and that was also rejected by the Tribunal on 20th May, 1986. In the second question, there is a dispute regarding claim of Rs. 16,102 spent by the assessee on legal charges paid to advocates and chartered accountants. Out of that amount AO allowed only Rs. 5,000 under s. 80VV and the balance amount has been disallowed. The assessee further challenged the balance amount disallowed by the AO.
In appeal before the Tribunal, the Tribunal relying on its earlier decision for asst. yr. 1978-79 similarly disallowed a sum of Rs. 2,090 over and above the amount estimated under s. 80VV. Heard learned counsel for the parties. The admitted facts are that ITO charged interest under s. 216 of the IT Act. The matter was restored back to the IAC(Asst) by CIT(A) to decide the issue afresh and pass speaking order. Mr. Mehta, learned A.G. submits that when order was not speaking and there was no application of mind, while charging interest under s. 216, therefore, that order should liable to be set aside. Mr. Singhi, learned counsel for the Department, submits that if the order is not speaking and no reasons are given, the CIT(A) has rightly restored the matter back to the AO to pass a fresh order and give reasons for charging interest under s. 216 of the Act. Considering the submissions and in practice for charging the interest under s. 216, no detailed reasons need to be given by the AO, when the CIT(A) has restored the matter back to the AO to pass a fresh order and give reasons for charging the interest, we do not find any infirmity in such direction. The amount, which has been claimed for deduction under s. 80VV only part thereof has been disallowed. The Tribunal was right in its approach in disallowing the payment of fees to chartered accountants for filing the returns and preparing the accounts after close of the year and for litigation to contest the tax imposed. We do not find that the payment of fees incurred for such type of jobs was for the business of the assessee. It relates to the income and that income has already been earned in the previous year. To contest for the tax imposed cannot be said to be for the purpose of business, particularly when negligible part of the amount of fees has been disallowed. We find no justification to interfere in such disallowance i.e., only Rs. 2,090. Therefore, no interference is called for in both the issues raised in the questions referred. In the result, we answer the questions in affirmative i.e., in favour of the Revenue and against assessee. Reference so made stands disposed of accordingly.
[Citation : 261 ITR 766]
