Commissioner of Income Tax vs Saraswati Industrial Syndicate Ltd. (No. 3)

S.S. Sodhi J.—The assessee, Saraswati Industrial Syndicate Limited, is a limited company and its business is manufacture of machinery for sugar mills and cement factories and to execute casting fabrication and other jobs for such industrial concerns, besides manufacture of sugar.

The matters raised here pertain to the assessment year 1974-75. The two questions to be answered by this court are :

"1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the words ''corrosive chemicals'' employed in entry (ii) B(7) of Para III of Part I of Appendix I to the Income Tax Rules, 1962, contemplated not only free chemicals but also non-free chemicals of corrosive effect ?

Whether the Tribunal was in error in holding that the assessee could agitate in its quantum appeal the question of changeability of interest u/s 139(8) of the Act ?"

The first question has to be answered in the negative, in favour of the Revenue and against the assessee, following the earlier judgment of this court in Commissioner of Income Tax Vs. Saraswati Industrial Syndicate Ltd., where this precise question arose with regard to this very assessee.

Turning to the second question regarding interest, reference may be made to the judgment of the Supreme Court in Central Provinces Manganese Ore Co. Ltd. Vs. Commissioner of Income Tax, where it was held that the levy of interest was a part of the process of assessment and it was open, therefore, to an assessee to dispute the levy of interest in appeal, provided he limited himself to the ground that he is not liable to the levy at all, but if the assessee does not dispute the amount of advance tax determined as payable by the Income Tax Officer, he cannot object merely to the levy of penal interest or question its quantum. It was accordingly observed, at p. 967 : "We hold that the question whether a case is made out for waiver or reduction of the interest levied under Sub-section (8) of Section 139 or u/s 215 cannot be the subject of an appeal under Clause (c) of Section 246 of the Income Tax Act. That is a matter which can more appropriately be dealt with by the Commissioner of Income Tax in the exercise of his revisional jurisdiction."

The second question has thus to be answered in terms of the judgment of the Supreme Court in Central Provinces Manganese Ore Co. Ltd. Vs. Commissioner of Income Tax, .

This reference is disposed of accordingly. There will, however, be no order as to costs.