Deputy Commissioner Of Income Tax vs Amir Morani
2001 Latest Caselaw 59 Bom

ORDER

Behari Lal, A.M.

This appeal of the department is directed against the order of the Commissioner (Appeals), Central-V, Mumbai, dated 24-6-1999, for the assessment year 1996-97. The only ground of appeal taken up by the department is that the Commissioner (Appeals) has deleted the interest charged under sections 234A and 234B. Accordingly to the department, the provisions of sections 234A, 234B and 234C were introduced with effect from 1-4-1989, which requires an assessee to mandatorily compute the interest chargeable under the said sections and to make payment of the same under section 140A before filing the return of income and without any notice from the department. It is also stated that the learned Commissioner (Appeals) has failed to appreciate the intern of the enactment of the provisions of section 234A and 234B and has allowed relief only on the technical ground that the assessing officer had not given any specific direction under sections 234A and 234B. The learned Commissioner (Appeals) deleted the interest charged under sections 234A and 234B on the ground that the interest has been charged only in the demand notice and the same not considered in the assessment order.

2. During the course of hearing, it was brought to our notice that the present issue is fully covered with the Supreme Court decision in the case of CIT v. Ranchi Club Ltd. (2000) 19 DTC 248 (SC) : (2001) 247 ITR 209 (SC) wherein the Honble Supreme Court has laid down that the interest can be charged only on the returned income and not on the assessed income. In the case of Uday Mistanna Bhandar & Complex v. CIT (1996) 222 ITR 44 (Pat), the Patna High Court held that if there is no order in the assessment order levying interest under any of the sections 234A, 234B and 234C, interest cannot be levied through notice of demand. The case of the assessee is fully covered with the above Supreme Court and Patna High Court decisions. Therefore, the order of the learned Commissioner (Appeals) is upheld.

2. During the course of hearing, it was brought to our notice that the present issue is fully covered with the Supreme Court decision in the case of CIT v. Ranchi Club Ltd. (2000) 19 DTC 248 (SC) : (2001) 247 ITR 209 (SC) wherein the Honble Supreme Court has laid down that the interest can be charged only on the returned income and not on the assessed income. In the case of Uday Mistanna Bhandar & Complex v. CIT (1996) 222 ITR 44 (Pat), the Patna High Court held that if there is no order in the assessment order levying interest under any of the sections 234A, 234B and 234C, interest cannot be levied through notice of demand. The case of the assessee is fully covered with the above Supreme Court and Patna High Court decisions. Therefore, the order of the learned Commissioner (Appeals) is upheld.

3. In the result, the appeal is dismissed.

3. In the result, the appeal is dismissed.