BENNETT, COLEMAN and CO.LTD vs. THE DEPUTY COMMISSIONER OF INCOME TAX,SPL RANGE 18,MUMBAI and ANR

1 ITXA 100-02 Judgment.odt IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.100 OF 2002 Bennett Coleman & Co. Ltd. ] a Company incorporated under the Companies ] Act, 1956, having its registered office at ] Times of India Building, Dr. D. N. Road, Mumbai ] Mumbai – 400 001. ] … Appellant Versus 1. The Deputy Commissioner of Income Tax, ] Special Range 18, Mumbai. ] 2. The Commissioner of Income Tax, ] City III, having his office at Aayakar Bhavan ] M. k. Marg, Mumbai - 400 020. ] … Respondents Mr. J. D. Mistri, Senior Advocate a/w Mr. Jas Sanghavi, Advocate i/b PDS Legal for Appellant. Mr. P. C. Chhotaray, Advocate, for Respondents. CORAM :- K. R. SHRIRAM & AMIT B. BORKAR , JJ. RESERVED ON :- 03 DECEMBER , 20 21 PRONOUNC ED ON :- 20 DECEMBER , 20 21 ORAL JUDGMENT : (PER : AMIT B. BORKAR. J.) :- 1. In this appeal under Section 260-A of the Income Tax Act, 1961, three questions of law have been formulated, these being as follows: (i) Whether on the facts and in the circumstances of the case and in law, the Tribunal was right in holding that a fresh assessment which has been made by the Assessing Officer to give effect to the directions of the Commissioner of Income Tax under Section 263 of the Act setting aside the original URS 1 of 9 UMESH RAMESH SHINDE Digitally signed by UMESH RAMESH SHINDE Date: 2021.12.20 14:42:29 +0530 CNR No : HCBM020004002002 Uploaded on - 20/12/2021 Downloaded on - 31/10/2026 01:30:22 2 ITXA 100-02 Judgment.odt assessment, would constitute a ‘regular assessment’ for purposes of section 215 of the Act ? (ii) Whether on the facts and in the circumstances of the case and in law, the Assessing Officer is entitled to charge interest under Section 215 of the Act despite the fact that the assessment order does not contain any direction that such interest would be charged ? (iii) Whether on the facts and in the circumstances of the case and in law, the Tribunal ought to have held that in the light of the Judgment of this Hon’ble Court in the case of CIT Vs. Bennett Coleman & Co. Ltd. [217 ITR 216] and in the light of the finding in the order dated 20th March, 1989 passed under Rule 40(1) of the Rules that the delay in finalisation of the assessment was not attributable to the Appellant, the Assessing Officer was not justified in waiving only the interest chargeable for a period exceeding one year and he ought to have waived the entire interest ? 2. The Appeal, in this case, arises out of an order dated 30th August 2001 passed by the Income Tax Appellate Tribunal for Assessment Year 1985-86. 3. In respect of the assessment year 1985-86, on 4th September 1985 the Appellant filed return of income, disclosing a total income of URS 2 of 9 Uploaded on - 20/12/2021 Downloaded on - 31/10/2026 01:30:22 3 ITXA 100-02 Judgment.odt Rs.1,53,41,650/-. The Assessing Officer passed an assessment order dated 28th March 1988 under Section 143(3) of the Act and, after making various additions and disallowances to the income returned by the Appellant, assessed a total income of Rs.2,74,47,780/-. In the assessment order, the Assessing Officer, inter alia, directed interest under Section 215 of the Act to be charged. The Assessing Officer levied interest of Rs.13,67,999/- under Section 215 of the Act vide the computation sheet. 4. Being aggrieved by the action of the Assessing Officer in charging interest under Section 215 of the Act, the Appellant filed an application dated 8th July 1988 for waiver of interest under Section 215(4) of the Act read with Ruled 40 of the Income-tax Rules, 1962 ('the Rules). The Deputy Commissioner of Income Tax passed an order dated 20th March 1989 under Rule 40(1) of the Rules holding that the delay in finalisation of the assessment was not attributable to the Appellant and waived the interest under Section 215 of the Act beyond one year of the filing of the return of income. The Deputy Commissioner of Income Tax accordingly re-calculated the interest chargeable under Section 215 at Rs.4,13,630/- and waived the balance of Rs.4,40,020/-. 5. The Appellant received a show cause notice dated 6th March 1990 under Section 263 of the Act from the Commissioner of Income-tax. URS 3 of 9 Uploaded on - 20/12/2021 Downloaded on - 31/10/2026 01:30:22 4 ITXA 100-02 Judgment.odt The Appellant filed its objections by letter dated 26th March 1990, objecting to the proposed action. The Commissioner of Income-tax passed an order dated 30th March 1990 under Section 263 of the Act setting aside the assessment in its entirety with directions to the Assessing Officer to reframe the assessment after proper verification and application of mind. 6. In compliance with the order under Section 263 of the Act, the Assessing Officer passed a fresh assessment order dated 9th March 1992 under Section 143(3) of the Act read with Section 263 of the Act. The Assessing Officer gave effect to order dated 30th March 1990 by making certain additions and disallowances and computed the income of the Appellant at Rs.4,04,37,692/-. There was no direction in the said order regarding the charging of interest under Section 215 of the Act. However, in the computation sheet annexed to the said order, an interest of Rs.23,91,413/- under Section 215 had been charged. The Assessing Officer had also charged interest under Section 139(8) of the Act. 7. Being aggrieved by the various additions and disallowances made and the interest under Sections 215 and 139(8) levied by the Assessing Officer, the Appellant filed an appeal before the Commissioner of Income Tax (Appeals). The said appeal was disposed of by the Commissioner of Income Tax (Appeals) vide an order dated 28th URS 4 of 9 Uploaded on - 20/12/2021 Downloaded on - 31/10/2026 01:30:22 5 ITXA 100-02 Judgment.odt September 1992 holding that interest could not be charged under Sections 215 or 139(8) unless it has been charged earlier or it falls within the meaning of Sections 215(3) or 139(8)(b) of the Act. 8. Being aggrieved by order of the Commissioner (Appeals) with regard to the issue of levy of interest under Section 215, the Assessing Officer filed an appeal before the Tribunal. While challenging said order, the Assessing Officer accepted that part of the order of the Commissioner (Appeals), which deleted the levy of interest under Section 139(8) of the Act and confined the Appeal to the deletion of interest under Section 215(6) of the Act. The Tribunal by impugned order restored interest levied by assessing officer by way of computation sheet annexed to the