- (1.) The revenue has preferred this appeal under section 260A of the Income Tax Act, 1961 (in short, "the Act") against the order dated 13.3.2000, Annexure A.7 passed by the Income Tax Appellate Tribunal, Delhi Bench 'D' Delhi (for brevity, "the Tribunal") in ITA No.5302/DEL/1997, for the assessment year 1995-96, claiming following substantial questions of law:- 1. Whether on the facts and in the circumstances of the case, the ITAT is right in law in admitting a second Misc. Application for recalling the original order when the first Misc. Application has been rejected by holding that there was no mistake apparent from the records which required action under section 254(2) of the Income tax Act 2. Whether, on the facts and in the circumstances of the case, the ITAT is right in law in holding that the disallowance of the claim of interest of Rs.3,23,29,399/- by way of prima-facie adjustment under section 143(1)(a) and further rejection of the assessee's claim under section 154 for rectification of the same by the AO was wrong and consequently the charging of additional tax of Rs.29,74,305/- under section 143(1) (a) of the Income tax Act was unjustified and wrong 3. Whether, on the facts and in the circumstances of the case, the ITATis right in law in holding that there was similarity between the deferred payment of interest and the deferred payment of sales tax considered as allowable under section 43B of the Act as per CBDT circulars
(2.) Briefly, the facts as narrated in the appeal may be noticed. Income tax return for the assessment year 1995-96 was filed by the assessee on 29.11.1995 declaring a loss of ' 7,97,32,350/-. While processing the return under section 143(1) (a) of the Act, disallowance of ' 3,23,29,399/- was made on account of interest shown as due to the financial institutions as on 31.3.1995. This amount of interest had been debited to profit and loss account and also shown as liability in the balance sheet but not paid during the previous year and even upto the date of filing of the return. Additional tax under section 143(1A) of the Act amounting to ' 29,74,305/- was duly charged. Application under Section 154 of the Act was filed on 4.11.1996 to rectify the intimation to delete the addition of '3,23,29,399/- made on account of interest payable and also for deleting the additional tax amounting to ' 29,74,305/-. It was pleaded that the assessee had borrowed term loan from leading bank IDBI and its other participant financial institutions. It had to pay interest of '3,23,29,399/- as on 31.3.1995. Due to financial crisis the assessee-company was not in position to pay interest. It requested the IDBI to re-schedule the interest payment by converting the same to term loan. Its request was accepted and interest due was converted into term loan deferred interest account. The assessee company relying upon circulars dated 25.9.1987 and 29.12.1993 prayed that the statutory liability be treated as discharged for the purpose of Section 43B of the Act. The Assessing Officer rejected the Application for rectification under section 154 of the Act. Aggrieved by the order, the assessee-company filed an appeal before the CIT(A), which was dismissed vide order dated 4.8.1997, Annexure A-4. Aggrieved by the order, the assessee filed appeal before the Tribunal. Vide order dated 14.8.1998, Annexure A-5, the Tribunal upheld the order of CIT(A). An application filed by the assessee for recalling order dated 14.8.1998 was dismissed by the Tribunal on 30.9.1999. The assessee filed another application before the Tribunal praying that in view of errors of omissions and commissions in the Tribunal's order dated 14.8.1998, the same be recalled and the appeal be re-fixed for de novo hearing. The Tribunal disposed of the application vide order dated 13.3.2000, Annexure A.7 and recalled its earlier order for deciding the appeal afresh. Hence this appeal.
(3.) Learned counsel for the revenue did not address any arguments on Questions No.2 and 3 as the Tribunal had not decided these issues on merits vide the impugned order dated 13.3.2000. However, learned counsel for the revenue with regard to Question No.1 submitted that the Tribunal had dismissed the appeal of the assessee vide order dated 14.8.1998, Annexure A-5, rejecting the contentions on merit. The assessee had filed an application for rectification, disputing the disallowance of ' 3,23,29,399/- under section 43B of the Act and charging of additional tax of ' 29,74,305/- under section 143(1A) of the Act. The said misc. application was also dismissed by the Tribunal on 30.9.1999. Yet again, the assessee moved another application under section 254(2) of the Act seeking rectification of the order dated 14.8.1998 on the ground that there were numerous errors which existed in the order and the same was required to be recalled and appeal refixed for de novo hearing. The said application has been illegally allowed on 13.3.2000 vide order impugned herein.;