COMMISSIONER OF INCOME-TAX vs. RUTESHBHAI K. BHATT

ITR/280/1992HC GujaratGJHC24015620199210 January 2005Author: HONOURABLE MR. JUSTICE D.A.MEHTA,HONOURABLE MS. JUSTICE HARSHA DEVANI3 pages
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What were the facts?

The Income Tax Officer charged interest under Section 215 of the Income Tax Act, 1961, for Assessment Year 1982-83, following an order by the Commissioner under Section 263. The assessee appealed to the Commissioner of Income-tax (Appeals), who deleted the interest. The CIT(Appeals) held that sub-section (3) of Section 215, which was the basis for charging interest, came into effect only from April 1, 1985, and was thus not applicable to the Assessment Year 1982-83. The revenue appealed to the Income Tax Appellate Tribunal, which upheld the CIT(Appeals)'s order and dismissed the revenue's appeal. The Commissioner of Income-tax then referred a question of law to the High Court.

What did the High Court hold?

The High Court held that the Appellate Tribunal was right in sustaining the order of the Commissioner of Income-tax (Appeals) in deleting the interest charged by the Income-tax Officer under Section 215 of the Income-tax Act, 1961. The reasoning was based on a direct decision of the High Court in the case of Commissioner of Income Tax Vs. Vishwajit Mehta, (2002) 254 ITR 66. This precedent established that Section 215(3) was not applicable for the Assessment Year 1982-83. Therefore, the question referred to the Court was answered in the affirmative, in favour of the assessee and against the revenue. The reference was disposed of accordingly, with no order as to costs.

What were the issues?

1. Whether, in law and on fact, the Appellate Tribunal is right in sustaining the order of the Commissioner of Income-tax (Appeals) in deleting interest charged by the Income-tax Officer under Section 215 of the Income-tax Act, 1961, for Assessment Year 1982-83? Assessee's contention: The Commissioner of Income-tax (Appeals) correctly deleted the interest because sub-section (3) of Section 215, which permitted the charging of such interest, was not in force for the Assessment Year 1982-83, having come into effect only from April 1, 1985. Revenue's contention: The revenue contended that the interest charged under Section 215 was justified. However, the judgment does not explicitly detail the revenue's arguments beyond their appeal against the CIT(Appeals)'s order.

Which sections of the Income-tax Act were involved?

Section 215,Section 256(1),Section 263

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 280 of 1992

For Approval and Signature:

HON'BLE MR.JUSTICE D.A.MEHTA and HON'BLE MS.JUSTICE H.N.DEVANI ============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements?

2.

To be referred to the Reporter or not? : YES

3.

Whether Their Lordships wish to see the fair copy : NO of the judgement?

4.

Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder?

5.

Whether it is to be circulated to the concerned : NO Magistrate/Magistrate

The order continues below.

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