Interest under sections 234A and 234B cannot be added through a demand notice alone when the assessment order is silent.

Interest under sections 234A and 234B could not be sustained where the assessment order contained no specific levy and the demand notice attempted to introduce it for the first time. The Tribunal applied binding precedent that such interest must be charged with reference to the returned income and only when the assessment order directs its levy. On that basis, deletion of the interest was upheld and the Department's appeal failed.

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Issues: Whether interest under sections 234A and 234B of the Income-tax Act, 1961 could be sustained when it was not levied in the assessment order and was sought to be charged only through the notice of demand.

Analysis: The appeal turned on the settled position that interest under these provisions must be specifically levied in the assessment order and cannot be introduced for the first time in the demand notice. The Tribunal noted that the issue was covered by binding precedent holding that such interest is chargeable only with reference to the returned income and not by a subsequent demand notice when the assessment order contains no direction to levy it.

Conclusion: The deletion of interest under sections 234A and 234B was upheld and the Departmental appeal failed.

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