Supreme Court dismisses appeal on interest levy under IT Act.

The appeal under section 260A of the IT Act, 1961 was dismissed by the Supreme Court. The Court upheld the decisions of the Patna High Court and the Income-tax Appellate Tribunal, Delhi Bench 'A', Delhi, stating that interest cannot be levied under section 234B of the Act without a specific order in the assessment. The absence of such an order led to the deletion of the interest charged, and the appeal was dismissed as no substantial question of law remained.

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Issues involved: Appeal u/s 260A of the IT Act, 1961 against the order of the Income-tax Appellate Tribunal, Delhi Bench 'A', Delhi pertaining to the assessment year 1996-97.

Judgment Summary:

1. The Tribunal deleted the interest levied u/s 234B of the Act, citing lack of application of mind by the Assessing Officer (AO) as no order for charging interest was made during assessment. The Tribunal relied on judgments of the Patna High Court in Ranchi Club Ltd. vs. CIT and Uday Mistanna Bhandar & Complex vs. CIT & Ors., which held that interest can only be claimed when there is a specific order in the assessment order. The Supreme Court affirmed these decisions in CIT vs. Ranchi Club Ltd., concluding no substantial question of law remains as there was no order for charging interest in the present case.

2. A Full Bench of the Patna High Court in Smt. Tej Kumari & Ors. vs. CIT reiterated the view that interest cannot be charged in the absence of a specific order by the assessing authority, aligning with the decisions upheld by the apex Court. Consequently, the appeal was dismissed based on the absence of an order for charging interest u/s 234B of the Act in the assessment order.

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