Bombay High Court
Commissioner Of Income-Tax vs Prakash Cotton Mills Pvt Ltd. on 22 February, 1991
Equivalent citations: [1991]188ITR713(BOM)
JUDGMENT T.D. Sugla, J.
1. This is a case of a cross reference. The Income-tax Appellate Tribunal has referred to this court one question of law each at the instance of the assessee and the Department under section 256(1) of the income-tax Act, 1961. The proceedings relate to the assessment year 1971-72.
2. The question read thus :
At the instance of the assessee :
"Whether the Tribunal was right in holding that the levy of interest under section 139 and/or 215 of the Act was not appealable under section 246 of the Income-tax Act?"
3. At the instance of the Department :
" (1) Whether, on the facts and in the circumstances of the case and in law, the Tribunal was justified in directing the Income-tax Officer to give deductions for the provision of gratuity on scientific or actuarial valuation?
(2) Whether, on the facts and in the circumstances of the case and in law, the Tribunal was justified in holding that the assessee was entitled to weighted deduction under section 35B of the Income-tax Act, 1961, on the expenses met on the export markets development though the expenditure was incurred in India?"
4. In view of the Full Bench judgment of our court in the case of CIT v. Daimler Benz A. G. [1977] 108 ITR 961, the question of law referred to us at the instance of the assessee requires to be answered thus :
The assessee will have no right of appeal to the Appellate Assistant Commissioner merely against the quantum of penal interest charged, that is to say, merely for the purpose of raising a contention that the interest charged is excessive or should be reduced or should have been waived altogether, but an appeal would lie to the Appellate Assistant Commissioner, if the assessee were to deny wholly is liability to pay such interest on the ground that he is not liable to pay advance tax at all or that the amount of advance tax determined as payable by the Income-tax Officer is not correct. From the statement of the case and the appellate order of the Appellate Assistant Commissioner and the Tribunal, it appears to us that the question of entertaining this ground has not been considered in the manner in which they were supposed to in accordance with the direction of our Full Bench judgment. Accordingly, when the matter goes back to the Tribunal, the Tribunal is directed to apply the principles laid down by our judgment supra and reconsider the question.
5. The questions referred to us at the instance of the Department, it is common grounds, are covered by our court's judgment in the case of CIT v. Eldee Wire Ropes Ltd. [1978] 114 ITR 485. Accordingly, we answer the questions in the affirmative and in favour of the assessee. There will be no order as to costs.