Specific reasons required for levy of interest under agricultural income-tax law; vague assessment order could not sustain the charge.

Interest under section 20C(5) of the Assam Agricultural Income-tax Act, 1939 requires a specific order setting out the grounds, relevant period and rate of levy. The assessment order in question merely directed addition of interest without recording reasons or identifying the period for which interest was charged. As section 20C(5) was treated as materially similar to section 234B of the Income-tax Act, 1961, the absence of a clear and specific authorisation meant the interest demand could not be sustained. The levy was therefore invalid and quashed in favour of the assessee.

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Issues: Whether interest could be levied under section 20C(5) of the Assam Agricultural Income-tax Act, 1939 without a specific order stating the grounds, period, and rate of interest.

Analysis: The assessment order merely directed addition of interest and did not record any reasons for levy or specify the relevant period. Section 20C(5) of the Assam Agricultural Income-tax Act, 1939 was treated as materially similar to section 234B of the Income-tax Act, 1961. In the absence of a specific and clear order authorising levy of interest, the charge could not be sustained.

Conclusion: The levy of interest was invalid and was quashed, in favour of the assessee.

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