AI Structured Summary
Not yet generated for this judgment
Judgment
K.A. Puj, J.—The revenue has preferred this Tax Appeal against the order passed by the Income Tax Appellate Tribunal for assessment year 1987-88. The appeal was admitted by this court on 11-2-2002 and the following questions of law were formulated by the Court:
Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal has substantially erred in law and on facts in holding that the assessee-company should be treated as a company where the public is substantially interested and a Public Limited Company?
Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal has substantially erred in law and on facts in deleting the interest charged u/s 215 of the Income Tax Act.
At the time of admission of this appeal, the court had directed that the appeal is to be heard with Income Tax Reference No. 57/1998 and Tax Appeal No. 241/2000.
ITR No. 57/98 is already disposed of by this court by judgment dated 20-6-2008 and the question as to whether the assessee is a company in which public are substantially interested is decided in favour of the assessee and against the revenue.
Following the above judgment of this Court, we answer the aforesaid question in favour of the assessee and against the revenue.
We have also decided Tax Appeal No. 241 of 2000 following the above decision of this court in ITR No. 57/98.
So far as the second question is concerned, namely, whether the Tribunal is right in deleting the interest charged u/s 215 of the Income Tax Act, we are of the view that this question being a consequential one, the same is required to be answered in favour of the assessee and against the revenue. Even while disposing of the appeal, the Tribunal has observed in its order that "the liability for charging interest u/s 215 arose due to addition in total income declared by the assessee and due to acceptance of differences regarding status of the assessee". The Tribunal has further observed, "the additions made in the assessment order by the assessing officer were highly debatable and the same were not foreseen at the time of filing the estimate of advance-tax. At the same time, it cannot also be denied the fact that the assessee was under a bona fide belief that its status of ''a company in which public are substantially interested would be accepted''.
Since the contention of the assessee is accepted by the Tribunal as well as by this Court, there is no question of charging interest u/s 215 of the Act. In any case, if the view taken by this court is reversed by the Apex Court if the decision is challenged, in that case, the question regarding charging of interest would arise. We are, therefore, of the view that the assessing officer may pass consequential order while giving effect to the order of this court.
Subject to the aforesaid observations, Question No. 2 formulated by this court is also answered in favour of the assessee and against the revenue since Question No. 1 is decided in favour of the assessee and against the revenue.
This Tax Appeal is accordingly dismissed without any order as to costs.