- (1.) THIS is a reference petition under Section 256(2) of the Income-tax Act, 1961, submitted by the Commissioner of Income-tax. A prayer has been made that the Tribunal may be directed to make a reference on the following questions of law for the opinion of this court: "(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessment order passed under Section 143(3)7263 on July 22, 1982, was not included in the definition of regular assessment ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the issue of chargeability of interest under Section 215 was not a debatable one and fell within the purview of Section 154 of the Income-tax Act, 1961 ?"
(2.) ASSESSMENT of the assessee, non-petitioner, for the assessment year 1977-78 was finalised by the Income-tax Officer, A Ward, Kota, on March 31, 1978. No directions were given under Section 215 for charging of interest. The Commissioner of Income-tax exercised the powers conferred on him under Section 263 and passed an order dated March 28, 1980 as under : "In view of the facts and circumstances of the case which have been discussed above, I consider that the assessment order for the assessment year 1977-78 passed by the Income-tax Officer on March 31, 1978, is erroneous and prejudicial to the interests of the Revenue. In order to meet the ends of justice and in the circumstances of the case, I hereby set aside the assessment for the assessment year 1977-78 with the direction that only the items discussed in this order shall be examined and assessment in respect of the same above will be made de novo. The Inspecting Assistant Commissioner (Assessment) is directed to pass a fresh order in accordance with the provisions of law subject to the above restriction after providing the assessee-company with a proper opportunity of. being heard." In pursuance of the order passed by the Commissioner of Income-tax, the Income-tax Officer passed a fresh assessment order in terms, of the directions given by the Commissioner of Income-tax. The respondent, being aggrieved with the fresh assessment order passed by the Income-tax Officer, submitted an appeal against the said order but the same was rejected on the ground that the appeal is not maintainable as an appeal does not lie. Thereafter, an application under Section 154 of the Income-tax Act was submitted by the assessee for the rectification of the mistake stating therein that interest is not chargeable and that the same cannot be charged. The contention of the assessee was that since, in the first regular assessment order, interest was not charged by the Income-tax Officer it could not be charged in the fresh assessment done under the directions of the Commissioner issued under Section 263 of the Act. It was also submitted that there is no provision under Section 215 for the enhancement of the liability of interest. The application of the assessee was rejected by the Inspecting Assistant Commissioner of Income-tax, vide order dated February 11, 1985. An appeal was preferred against the said order before the Commissioner of Income-tax and the Commissioner of Income-tax, vide order dated May 7, 1985, accepted the appeal of the assessee and held that the Inspecting Assistant Commissioner was not justified in rejecting the application of the assessee under Section 154. The learned Commissioner also held that the interest under Section 215 was wrongly charged on the basis of the order passed by him under Section 263 of the Act. Learned Commissioner also held that the interest under Section 215 can be charged only in the "regular assessment". The Inspecting Assistant Commissioner was directed to accept the application of the assessee moved by him under Section 154 of the Act. Being aggrieved with the order passed by the learned Commissioner of Income-tax, an appeal was preferred by the Revenue before the Tribunal. The Tribunal came to the conclusion that fresh assessment was done in consequence of the direction of the Commissioner under Section 263 of the Act and refund of excise duty was included as income of the year 1977-78 though the amount was received subsequently and shown as income by the assessee in the assessment year 1979-80. The Tribunal held that there is a prima facie case that the assessee has not paid the tax under a bona fide belief that the tax is payable for the year 1979-80, the year in which the amount of refund was received and not in the year 1977-78. The Tribunal upheld the order passed by the learned Commissioner.
(3.) REFERENCE under Section 256(1) of the Income-tax Act was submitted by the Commissioner of Income-tax, Jaipur, before the Tribunal with the request that questions of law arise out of the order of the Tribunal and the questions referred to in para 4 of the application should be referred to the High Court for decision. The petition was rejected by the Tribunal, and as such, this application under Section 256(2) was submitted before this court for directing the Tribunal to refer the questions referred to above for the decision of this court. Mr. Singhal, appearing on behalf of the Revenue, with all vehemence at his command, submitted that the doctrine of merger should be applied in this case and that no application lies before the Inspecting Assistant Commissioner under Section 154 of the Act. He submitted that the appeal was preferred against the order of the Inspecting Assistant Commissioner and the same has been dismissed, as such, the doctrine of merger should be applied and, if any application lies, it lies to the final authority, namely, the Commissioner who has rejected the appeal. We have perused the record and heard the submissions of both the parties. It is true that the appeal was submitted against the order of the Inspecting Assistant Commissioner and the same has been rejected by the Commissioner on the ground that the appeal does not lie and as such, the appeal is not maintainable. The appeal has not been decided on merits and the same has been rejected by the Commissioner on the ground of jurisdiction and as such, the question of merger does not apply. On this ground, it will not be proper to say that the petition under Section 154 for rectification of the mistake apparent on the face of the record does not lie before the Inspecting Assistant Commissioner. On behalf of the Revenue, it was submitted that the fresh assessment done in pursuance of the directions issued under Section 263 should be considered as a regular assessment. Section 2(8) defines "assessment" as under : '"assessment' includes reassessment." ;