1996 (2) TMI 125

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....delivered by D. N. BARUAH J.---In this reference under section 256(1) of the Income-tax Act, 1961, the following question has been referred to this court for opinion : " Whether, on the facts and in the circumstances of the case, the Tribunal was justified in sustaining the Appellate Assistant Commissioner's order cancelling the order under section 201(1A) of the Income-tax Act, 1961, chargi....

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....essee to pay interest of Rs. 9,954 under section 201(1A). Being aggrieved, the assessee preferred an appeal before the Appellate Assistant Commissioner of Income-tax. The Appellate Assistant Commissioner allowed the appeal by observing as follows : "After carefully considering the matter, I find that the appellant is a Government undertaking. Tax deducted by it has been paid to the Governmen....

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....r standing counsel for the Revenue, assisted by the junior standing counsel, Mr. U. Bhuyan. None appears for the assessee. Mr. Joshi submits that both the Appellate Assistant Commissioner and the Tribunal erred in law in interpreting the provision ; of section 201(1A). Mr. Joshi submits that imposition of penalty and charging of interest can be made in two different circumstances. The Assessing....

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....apex court observed that interest is levied by way of compensation and not by way of penalty. On going through the provision of section 201(1A) it is clear that interest has to be paid for delayed payment of tax. The section does not impose any restriction unlike penalty. The Assessing Officer has jurisdiction to impose penalty only when he finds that delay in payment was without good and suffi....