K.k. Kansal v. Commissioner Of Income Tax

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH. I.T.A. No.157 of 2004 Date of decision: 13.10.2010 K.K. Kansal. Vs. Commissioner of Income Tax. -----Appellant. -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOELHON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:-Mr. D.K. Goyal, Advocatefor the appellant. for the appellant. Mr. Sanjeev Kaushik, Sr. Standing Counselfor the respondent. --- ADARSH KUMAR GOEL, J. 1. This order will dispose of I.T.A. Nos.157 and 158 of2004, as both the appeals have been filed by the same assesseeraising common questions of law. While admitting the appealsvide order dated 27.7.2004, following questions were framed:- In I.T.A. No.157 of 2004:- “Whether on the facts and circumstances of the case,in the absence of any direction in the assessmentorder for levy of interest under Section 234B and234C of the Income Tax Act, 1961, the AssessingOfficer could charge such interest while computing thetax liability? In I.T.A. No.158 of 2004:- “1.Whether on the facts and circumstances of thecase, in the absence of any direction in theassessment order for levy of interest underSection 234B and 234C of the Income Tax Act,1961, the Assessing Officer could charge suchinterest while computing the tax liability? case, in the absence of any direction in theassessment order for levy of interest underSection 234B and 234C of the Income Tax Act,1961, the Assessing Officer could charge suchinterest while computing the tax liability? 2. Whether in the facts and circumstances of thecase, the Income Tax Appellate Tribunal wasjustified in not entertaining the additional groundof appeal raised before it challenging the validityof notice under Section 148 of the Income TaxAct, 1961?” case, the Income Tax Appellate Tribunal wasjustified in not entertaining the additional groundof appeal raised before it challenging the validityof notice under Section 148 of the Income TaxAct, 1961?” 2. Learned counsel for the assessee states that he doesnot press question No.2 in I.T.A. No.158 of 2004. 3. Thus, common question in both the appeals which survives for consideration is levy of interest under Sections 234Band 234C of the Act, in absence of any direction in theassessment order. 4. The assessee received incentive bonus from Life Insurance Corporation which was held to be taxable under thehead of ‘Salary’. Appeal of the assessee was dismissed by theCIT(A). The CIT(A) also rejected the contention that interest wasnot leviable under Sections 234B of the Act. The Tribunal, onfurther appeal, upheld the said view relying upon judgment of theHon’ble Supreme Court inCITv. Anjum Ghaswala and others[2001] 252 ITR 1. 5. We have heard learned counsel for the parties. 6. Learned counsel for the assessee submits that sincein the order of assessment, there is no direction for recoveringinterest, the interest could not be recovered. He submits thatSection 156 of the Act provides for demand being raised forinterest in pursuance of the assessment order and thus, withoutassessment order containing a direction for levy of interest, levyof interest under Sections 234B and 234C of the Act was notpermissible. Reliance has been placed on CITv. Krishan Lal(HUF) [2002] 258 ITR 359 (Delhi),V.N. Dubeyv. CIT[2008] 10DTR 175 (MP) andUday Mistanna Bhandar & Complexv. CIT& ors.[1996] 222 ITR 44 (Patna). 5. We have heard learned counsel for the parties. 6. Learned counsel for the assessee submits that sincein the order of assessment, there is no direction for recoveringinterest, the interest could not be recovered. He submits thatSection 156 of the Act provides for demand being raised forinterest in pursuance of the assessment order and thus, withoutassessment order containing a direction for levy of interest, levyof interest under Sections 234B and 234C of the Act was notpermissible. Reliance has been placed on CITv. Krishan Lal(HUF) [2002] 258 ITR 359 (Delhi),V.N. Dubeyv. CIT[2008] 10DTR 175 (MP) andUday Mistanna Bhandar & Complexv. CIT& ors.[1996] 222 ITR 44 (Patna). 7. We are unable to accept the submission. It has beenheld by the Hon’ble Supreme Court in Anjum Ghaswala andothers that levy of interest under Sections 234B and 234C of theAct is mandatory. Mere non-mention of levy of interest in theorder of assessment cannot render the said statutory provisionnugatory. The interest being mandatory and not discretionary, therecovery thereof does not depend on the language of theassessment order. The judgments relied upon are either prior tojudgment of the Hon’ble Supreme Court in Anjum Ghaswala andothers or do not consider the Supreme Court judgment. The saidjudgments cannot, thus, be relied upon to hold that the levy ofinterest under Sections 234B and 234C of the Act was not permissible in absence of mention of levy of interest in theassessment order. 8. Accordingly, we answer the question against the assessee and in favour of the revenue. 9. The appeals are dismissed. (ADARSH KUMAR GOEL) JUDGE October 13, 2010ashwani ( AJAY KUMAR MITTAL ) JUDGE