COMMISSIONER OF INCOME TAX Vs. RAJASTHAN INDUSTRIAL AND CHEMICAL CORPORATION

JUDGEMENT

(1.) THIS reference under S. 256(1) of the INCOME TAX ACT, 1961, is at the instance of the Revenue to decide the following question of law :

(2.) THE relevant assessment year is 1973 -74. The ITO completed the assessment on an income of Rs. 1,01,290 and directed recovery of penal interest from August 16, 1973, to the date of filing of the return in response to the notice. The amount of penal interest was computed at Rs. 13,195. The assessee filed a quantum appeal to the AAC and therein also assailed the imposition of interest charged under S. 139(8) of the Act. The AAC held that the appeal was not competent against the imposition of interest under S. 139(8). On the assessee's further appeal to the Tribunal, it was held that the appeal was tenable also in respect of the penal interest levied on the assessee and, accordingly, the AAC was directed by the Tribunal to rehear the appeal. Aggrieved by the view taken by the Tribunal, the Revenue sought this reference for deciding the above question of law.

(3.) CONSEQUENTLY , the reference is answered against the Revenue and in favour of the assessee by holding that the Tribunal was justified in directing the AAC to entertain the appeal which was also against the levy of interest under S. 139(8) of the Act. No order as to costs.