M.M.KUMAR, J. - (1.) PASSED in respect of asst. yrs. 1976 -77 and 1980 -81. The facts are being referred from IT Ref. No. 23 of 2002. The details in respect of the abovementioned references are as under : Sr. IT Ref. Arising out of Asst. year Date of the order of the Tribunal, No. Nos. Amritsar Bench, Amritsar 1. 23 of 2002 ITA No. 489/Asr/1996 1976 -77 26.11.1997 2. 26 of 2002 ITA No. 493/Asr/1996 1980 -81 26.11.1997
(2.) AT the instance of the Revenue, the Income -tax Appellate Tribunal, Amritsar Bench, Amritsar (for brevity, 'the Tribunal'), has referred the following question of law for the opinion of this Court by exercising jurisdiction under s. 256 (1) of the IT Act, 1961 (for brevity, 'the Act') : "Whether on the facts and in the circumstances of the case, the learned Tribunal is right in law in reversing the order of the learned Dy. CIT(A) who upheld the order of the AO passed under s. 154 holding that no mistake was apparent from records insofar as charging of interest under s. 139(8) was concerned, for the asst. yr. 1976 -77 -
(3.) FACTS may briefly be noticed. The assessment in this case was originally completed in respect of the asst. yr. 1976 -77 on a total income of Rs. 9,990 plus agricultural income of Rs. 400 and in respect of asst. yr. 1980 -81 on total income of Rs. 8,240 plus agricultural income of Rs. 700. Subsequently, in the course of assessment for the asst. yr. 1990 -91, it came to the notice of the AO that the assessee had received additional compensation as also interest thereon as a result compulsory acquisition of the land belonging to the assessee, by the State Government. The assessee filed return of income for the asst. yrs. 1984 -85 to 1990 -91 disclosing therein interest income as also appropriate amount of capital gain arising out of the said compulsory acquisition of land. The AO sought to assess interest on accrual basis as interest was allowed by this Court right from asst. yr. 1974 -75. This exercise was supported by the judgment of Hon'ble the Supreme Court in the case of Rama Bai vs. CIT (1990) 84 CTR (SC) 164 : (1990) 181 ITR 400 (SC). However, the assessee resisted and insisted for reassessment of interest accruing from the asst. yrs. 1984 -85 onwards. As a consequence, proceedings under s. 147 of the Act were initiated and notices were served under s. 148 on the assessee 35,040 plus agricultural income of Rs. 400 in respect of the asst. yr. 1976 -77 and for the asst. yr. 1980 -81 he filed the return declaring income of Rs. 33,290 plus agricultural income of Rs. 700. Interest under s. 139(8) was also charged at Rs. 2,610 and Rs. 19,764 respectively. Thereafter, the assessee moved an application under s. 154 of the Act asserting therein that the interest was not chargeable by citing the orders passed in the cases of co -owners. The application was 1996. Tribunal. The Tribunal allowed the appeal by placing reliance on a clarification issued by the CBDT as to when the amendment of Expln. 2 appended to s. 139(8) of the Act was to be applied. The clarification in clear terms stated that it was to apply from the asst. yr. 1984 -85. The observation of the Tribunal in paras 4 and 5 reads as under : clear where the cases are reopened under s. 147, the CBDT has given clarification regarding the years from which the amendment of Expln. 2 is applicable and accordingly the amendment is applicable from the asst. yr. 1984 -85. Similarly regarding charging of interest under s. 215/217, the s. 215(6) related to the assessment under s. 147, the power to reproduced in (1985) 152 ITR (St.) 29 at p. 37, makes it clear that in case assessment is made under s. 147 for the first time then interest could be charged under s. 215/217 from asst. yr. 1985 -86 onwards. Apparently, if facts are so, which appear to be as per statement made by the appellant, before the Dy. CIT(A), then a mistake is apparent from law and as such the AO is bound to rectify charging of interest because it does not give him power to charge interest under ss. 139 and 215/217 for the asst. yrs. 1974 -75 to 1982 -83 because return has been filed first time in response to show - cause notice under s. 147 of the IT Act. The AO is directed to decide the application of rectification accordingly. 5. The appeals are accepted." ;