Commissioner of Income Tax vs Jhalani and Company

B.C. Patel, C.J.—At the instance of the Revenue, the Income Tax Appellant Tribunal has referred the following two questions:

Whether an appeal lies against an order of charging of interest u/s 215 of the Act?

Whether the Tribunal is empowered in law to invoke Rule 40(5) for deleting the levy of interest u/s 215?

Both the questions have to be answered in negative in view of the decision of the Supreme Court in the case of Central Provinces Manganese Ore Co. Ltd. Vs. Commissioner of Income Tax, wherein the question raised was :

"Whether orders levying interest under sub-section(8) of section 139 and u/s 215 are appealable u/s 246 of the Income Tax Act?"

The court held that the question whether a case is made out for waiver or reduction of the interest levied u/s 139(8) or u/s 215 cannot be the subject of an appeal under clause (c) of Section 246 of the Income Tax Act."

The court further pointed out:

"That is a matter which can more appropriately be dealt with by the Commissioner in the exercise of his revisional jurisdiction."

If the appeal itself is not maintainable, there is no question of Tribunal invoking Rule 40(5) of the Rules u/s 215 of the Income Tax Act.

The reference is answered accordingly with no order as to costs.