Mahindra & Mahindra Limited v. Commissioner Of Income-Tax, City Iv, Bombay

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX REFERENCE NO.24 OF 1993 Mahindra & Mahindra LimitedVersus ..Applicant. Commissioner of Income-tax, City IV, Bombay..Respondent. Mr.J.D. Mistry i/by Mr.B.V. Jhaveri & Ms.Priti Shukla for the appellant.Mr.P.S. Sahadevan for the respondent. CORAM : V.C. DAGA & J.P. DEVADHAR, JJ. DATE : 22nd JUNE, 2009 P.C. : 1.The tribunal has referred following question of law for the opinion of this Court, which reads thus : “Was the Income-tax Appellate Tribunal correct in law in holding that the Assessing Officer was justified, while passing an order u/s.154 of the I.T. Act, on the Applicant Company, for the assessment year 1980-81, to give some consequential effect to a reassessment of total income made on the Applicant company for assessment year 1979-80 pursuant to an order passed by the Commissioner of Income-tax u/s.263 of the said Act on the applicant Company for assessment year 1979-80, in ordering the recovery of the interest granted earlier to the Applicant Company u/s 244 (1A) of the said Act for assessment year 1980-81 ?” 2.During the course of hearing when Mr.Sahadevan was called upon to reply to the submissions made by the learned counsel for the applicant – assessee, he came out with with written submissions. The written submissions are taken on record. Relevant para of which is reproduced hereinbelow : “On perusing the sections relevant to charging and granting of interest, it appears that omission to incorporate similar provision to vary the interest on change in the total income is not conscious by the Legislature. The Tribunal has rightly held that there is no interdict in law that prevents varying such interest. It has been held that interest payment is compensatory in nature and not penal in character. 3.In view of the submissions made by the revenue, the question referred is answered in the negative i.e. in favour of the assessee and against the revenue. 4.The reference application is disposed of accordingly. (J.P. Devadhar, J.)(V.C. Daga, J.)