Bhaskar Bhattacharya, J. - (1.) THIS appeal under Section 260A of the Income-tax Act is at the instance of an assessee and is directed against a consolidated order passed by the Incometax Appellate Tribunal, "C" Bench, Calcutta, in ITA No.25 (Kol) of 2002 dated 20th February, 2004 for the assessment year 1997-98.
(2.) ALTHOUGH strictly speaking, two separate appeals ought to have been filed by the assessee, on an undertaking by Dr. Pal, the learned counsel appearing on behalf of the appellant, that his client will pay additional court-fees for two appeals, we have overlooked the aforesaid technical objection raised by the Revenue and propose dispose of this appeal. It appears from record that a Division Bench of this Court by order dated 30th November, 2004 admitted these appeals on the following substantial questions of law: "I) Whether in view of the fact that the Assessing Officer having issued the notice under Section 143(2) of the Act on 30th June, 1998 and started proceedings for regular assessment, he had no jurisdiction or competence or authority to issue the intimation on the same day and this point having been raised before the Tribunal and having been recorded also in the order of the Tribunal, the Tribunal acted illegally and improperly by not deciding the said question which affected the jurisdiction of the Assessing Officer to issue the intimation under Section 143(1)(a) of the Act? II) Whether in any event in issuing the intimation by the Assessing Officer disallowing the claim of Rs.1,46,37,744/- against the interest income assessed under the head "other sources", the Tribunal should have cancelled and/or set aside the said disallowance made by the Assessing Officer when the question involves as to whether the interest income is to be allowed on the facts and in the circumstances of the case is a debatable one on which not only there are two views but also which involves the investigation of facts and as such the said adjustments cannot be made under the proviso to Section 143(1) (a) of the Act and whether the Tribunal should have decided the said question when the said question has already been raised before the Tribunal and recorded in its appellate order? III) Whether in sustaining the additional tax under Section 143(1)(a) the Tribunal should have held that the levy of additional tax under Section 143(1)(a) is an imprint of penalty and as such no such imposition of additional tax under Section 143(1)(a) could be levied without giving the assessee an opportunity of being heard and without coming to a finding that there was any deliberate intention or means rea in avoiding the tax liability? IV) Whether the learned Tribunal was justified in law in not considering the grounds specifically urged by the assessee before the Learned Tribunal in respect of levy of interest under Section 201(1A) which has been imposed in the intimation issued under Section 143(1)(a) and which is also a part of the said intimation and in not setting aside the order of the Commissioner of Income tax (Appeals) in regard to the above issue?" The facts giving rise to filing of these appeals may be summed up thus: a) In the first appeal, the assessee has come against order made under Section 143(1) (a) of the Income-tax Act and the other appeal relates to the assessment under Section 143(3) of the Act. Both the appeals relate to the assessment year 1997-98. b) The assessee filed its return of income on 28th November, 1997 for the assessment year 1997-98 along with tax audit report and audited statement of account. In computation of total income filed along with the return of income, the assessee offered for taxation income under the heads business, capital gains and other sources separately to arrive at the total income as required. c) In the books of account, the assessee debited total interest of Rs.6,08,19,588/-. A part of the aforesaid amount being a sum of Rs.1,46,37,744/- related to money lent, which had fetched the interest income of Rs.1,50,90,457/- and the same was offered for taxation under the head income from other sources. In order to charge expenses against the particular head of income for which it was incurred, the assessee in his return of income was required to eliminate from the computation of business income, the interest expenditure relatable to earning interest income under the head other sources. The assessee, it appears from record, reduced the income under the head other sources by a sum of Rs.1,46,37,744/- being interest relatable to earning interest income. The Assessing Officer by intimation made under Section 143(1)(a) dated 30th June, 1998 changed the computation by not allowing the interest claimed amounting to Rs.1,46,37,744/- as deduction from interest income offered under the head other sources and levied additional tax under Section 143(1)(a) of the Act amounting to Rs.12,58,846/-. The Assessing Officer also levied interest under Section 201(1A) of the Act amounting to Rs.3,90,599/- in the intimation order dated 30th June, 1998 made under Section 143(1)(a) of the Act on the ground of delayed payment of tax deducted at source. d) The assessee preferred an appeal before the Commissioner of Income-tax(Appeal) against the intimation made under Section 143(1)(a) dated 30th June, 1998 and challenged the action of the Assessing Officer in disallowing the deduction of interest paid relatable for earning the interest income offered for taxation under the head other sources. Further grounds were taken against the imposition additional tax under Section 143(1A) of the Act and the levy of interest under Section 201(1A) of the Act. e) On the date of issue of the aforesaid intimation order under Section 143(1) (a) of the Act, i.e. 30th June 1998, a further notice under Section 143(2) of the Act was issued for regular assessment calling upon the assessee to produce the books of accounts and other documents. It appears from record that the assessee filed a revised computation under the cover of its letter dated 18th February, 2002 by admitting the mistake that instead of deducting from business the loss a sum of Rs.1,46,37,744/-, he added the same to the business loss as a result of which the business loss was increased instead of the same being reduced. It appears that the business loss was shown at Rs.14,16,12,679/- instead of Rs.11,23,37,191/-. f) The Assessing Officer accepted the revised computation of the total income filed on 18th February, 2002 during the course of assessment proceeding and completed the assessment under Section 143(3) of the Act vide his order dated 20th February, 2000. g) In the appeal preferred by the assessee before the Commissioner of Income-tax (Appeal) against intimation order dated 30th June, 1998, the case of the assessee was that the Assessing Officer was not correct in disallowing the claim of deduction of interest paid on money borrowed for the purpose of granting loans and advances which had fetched the interest income and offered for taxation under the head other sources on the facts of the case. The other ground was in respect of the imposition of additional tax under Section 143(1A) of the Act and the levy of interest under Section 201(1A) of the Act. h) The Commissioner of Income-tax (Appeal), however, did not accept the assessee"s contention and remanded the matter to the Assessing Officer and directed him to compute the total income under Section 143(1) (a) of the Act once again and to enhance the amount of additional tax under Section 143(1A) on the basis of revised computation of income filed by the assessee on 18th February, 2000. i) As regards the levy of interest amounting to Rs.3,90,599/- under Section 201(1A), the Commissioner of Income-tax (Appeals) held that the levy of interest under Section 201(1A) was not appealable under Section 246A of the Act. Being dissatisfied, the assessee preferred further two appeals before the Income-tax Appellate Tribunal and by the order impugned in these appeals, the said Appellate Tribunal has dismissed both the appeals by overruling the submissions of the appellants.
(3.) BEING dissatisfied, the present two appeals have been filed. Dr. Pal, the learned senior counsel appearing on behalf of the appellants, has, at the first instance, submitted before us that the Assessing Officer having issued a notice under Section 143(2) of the Act on 30th June, 1998 and having started proceeding for regular assessment, acted without jurisdiction in issuing the intimation order and thus, the order of intimation passed under Section 143(1) (a) of the Act was liable to be quashed. After going through the order-sheet, we find that the order under Section 143(1) (a) of the Act was passed first on 30th June, 1998 and from the order-sheet it appears that the next order was for issue of notice under Section 143(2) of the Act although both were issued on the same date. Therefore, it is apparent on the face of record that the intimation order was first made under Section 143(1)(a) of the Act and thereafter, the Assessing Officer decided to issue a notice under Section 143(2) of the Act.;