ORDER
S.L. Banerjee, Judicial Member
1. This appeal is directed against the order of the learned DC (A) dated 24-4-1992.
2. The relevant facts are as follows :
While framing the original assessment, the Assessing Officer observed that a term deposit of the State Bank of India, Madhubani dated 26-5-1979 of Rs. 39,300, the document of which was found at the time of search in the assessee’s premises, could not be explained. However, in the computation of income he did not include this amount. While giving effect to the appellate order filed by the assessee on other points, the Assessing Officer in his order under Section 251/154 of the Income-tax Act, 1961 included this amount in the income of the assessee. The assessee preferred an appeal against this order.
3. The learned DC (A) was of the opinion that when the assessee did not object to the observation of the Assessing Officer in this respect in the appeal originally filed he could not raise objection in this appeal. He relied on the decision of the Hon’ble Patna High Court in the case of Ramanand Singh & Co. v. CIT [1987] 164 ITR 78. In the context of the assessee’s other objections against charging of interest under Sections 139(8), 217 and 220 he was of the view that they were rightly charged and no interference was called for.
4. The learned counsel for the assessee submitted that the inclusion of Rs. 39,300 while passing order under Section 251/154 of the Act was a mere change of opinion and it should be struck down. He further argued that the interests were not correctly computed in view of the fact that it was not due to default on the part of the assessee. On the other hand, the Department did not include the income alleged to belong to the assessee in the original assessment. The learned Departmental Representative strongly supported the order of the learned DC (A).
5. I have considered the rival submissions, the facts and the materials on record. In my view, the decision relied on by the learned DC (A) is not applicable in this case. In that case [The case relied on by DC (A)] the assessee failed to challenge the liability of penalty at the first instance; instead, subsequently, it tried to raise the matter in appeal against the rectification order. The Hon’ble High Court opined that when the assessee did not raise any objection against the levy of penalty initially it could not raise objection against it when the quantum of penalty was rectified in terms of the mandatory direction under Section 271(2) of the Act. But in the appeal before me the facts are different. Here, the assessee challenged the assessment but raised no objection in respect of Rs. 39,300 as the same was not added to the income of the assessee. It would be seen that in the case before the Hon’ble High Court there was levy of penalty, though erroneously computed, whereas, in the present case, there was no levy on this income for which the subsequent rectification was made. In my view, this is a pertinent difference and it makes a distinguishable feature from the case which was before the Hon’ble High Court. When the income was subsequently included the assessee raised objection by filing the impugned appeal. Hence, in my view, the learned DC (A) wrongly decided the issue rejecting the assessee’s contention. However, as he did not dispose of the matter on merit I restore this point to his file for readjudication with a direction to him to pass a fresh order after giving due opportunity to the parties.
6. After considering the submissions of the parties I fail to appreciate the objection raised by the assessee in respect of levy of excessive interest under Section 220(2) of the Act in the circumstances of the present case. Even if it is accepted that interest was excessively levied without any default on the part of the assessee, the objection cannot be entertained as there is no provision in Section 246 of the Act in this respect. The assessee is at liberty to proceed with the matter with the Chief Commissioner or the Commissioner as provided in Section 220(2A) of the Act. Sub-section (2A) of Section 220 empowers the prescribed authorities to reduce or waive the amount of interest payable by the assessee under this section. One of the conditions laid down in Sub-section (2A) is that the prescribed authorities may waive or reduce the interest if it is seen that the delay was beyond the control of the assessee. With this observation I reject this ground of appeal of the assessee.
7. In respect of levy of interest under Section 217, again, I find that no such provision has been made in Section246 of the Act. However, the levy of interest under Section 139(8) for a concurrent period for which interest under Section 217 is levied is unjustified. In other words, when the assessee has been charged interest under Section 217 he has no liability of interest under Section 139(8) of the Act for that period. The Hon’ble Supreme Court in the case of Ganesh Dass Sreeram v. ITO [1988] 169 ITR 221 has held that charging of interest is compensatory in nature. In the headnotes of the decision the following observation has been quoted :
Where the advance tax duly paid covers the entire amount of tax assessed, there is no question of charging the registered firm with interest even though the return is filed by it beyond the time allowed, regard being had to the fact that payment of interest is only compensatory in nature. As the entire amount of tax is paid by way of advance tax, the question of payment of any compensation does not arise.
8. The above observation makes it clear that there is only one tax i.e., income-tax. It is payable in advance or deductible at source or payable under Section 140A(3). If the advance tax is sufficient to cover the tax payable by an assessee no interest is chargeable for the delay in the filing of the return. Reciprocally, it can be said that if there is any shortfall in the payment of advance tax there can be charging of interest for such shortfall. The amount of interest is chargeable from the first day of the assessment year till the assessment is completed. That includes the period during which the return was delayed. Therefore, if for shortfall in payment of advance tax interest under Section 217 is charged then, again, interest under Section 139(8) cannot be charged because there cannot be two compensations for the same default. I can make the proposition more clear. If advance tax is paid more than the tax payable even if the return is delayed, no interest is chargeable under Section 139(8). This is because no compensation is payable to the Government as the tax has been sufficiently paid. However, if the tax is not sufficiently paid in advance by way of compensation interest under Section 217 has to be paid. If the above decision of the Hon’ble Supreme Court is correctly followed it could be seen that in that case no interest under Section 139(8) was permitted to be charged because advance tax was sufficiently paid. The Apex Court did not distinguish the tax payable in advance from the tax as per the return. Had it not been so, it would have been said that even if the advance tax has been fully paid interest under Section 139(8) is a separate compensation and, therefore, separate charging of interest would be there. In view of this matter I am of the opinion that once interest under Section 217 has been charged no interest under Section 139(8) can be charged for the concurrent period. The charging of interest under Section 139(8) is, therefore, cancelled and the charging of interest under Section 217 is confirmed.
9. In the result, the appeal is partly allowed.