Commissioner of Income Tax vs Rajah Mills Pvt. Ltd.

The Tribunal has confirmed the order of the Commissioner of Income Tax (Appeals) and held that the interest is to be levied only up to the date on which the books had been seized from the assessee and not for any period subsequent thereto as the books had been transferred from one Income Tax Officer to another and the assessee was unable to secure the documents and copies of books required for filing his return after the seizure. The Commissioner took the view that as the last date for filing the return was June 30, 1980, and since it was explained why the same was not filed by that date, he directed the Income Tax Officer to waive the interest up to the date of seizure. The Tribunal has merely confirmed that order of the Commissioner of Income Tax. The assessment year is 1980-81. The correctness of the Tribunal''s order is called in question in this reference.

The contention of the Revenue is that waiver of interest could be only by the Income Tax Officer/Inspecting Assistant Commissioner and not by the Commissioner of Income Tax (Appeals), the Tribunal should not have interfered with the discretion. It is within the purview of the appellate authority after taking note of the relevant facts, to direct that the levy of interest be limited to the period up to the date of seizure of the books.

We do not find any infirmity in the order of the Tribunal in upholding the direction of the Commissioner, in the instant case. We, therefore, answer the question referred to us in favour of the assessee and against the Revenue.