1990 (11) TMI 22

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....ent year 1977-78. The only point of dispute relates to the charging of interest under section 216 of the Income-tax Act, 1961. The Income-tax Officer, while completing the assessment, charged interest under section 216 of the Act without passing a speaking, order. The assessee appealed before the Commissioner of Income-tax (Appeals) who held that the Income-tax Officer should have passed a speakin....

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.... of the appellate authority was taken into consideration; the assessee was not to be charged interest under section 216 of the Act. Accordingly, the Tribunal set aside the order of the Commissioner of Income-tax (Appeals). On these facts the following question of law has been referred to this court : " Whether, on the facts and in the circumstances of the case, the Tribunal was justified in ....

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....d. reported in [1989] 180 ITR 21 this court held as follows (headnote) : " The authority who passes an order in exercise of a quasi-judicial function must record his reasons in support of the order he makes. The requirement of a speaking order cannot be dispensed with even when the authority has been vested with discretionary power. Interest under section 216 of the Income-tax Act, 1961, is ....

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....uld undoubtedly go to show that the charging of interest under section 216 of the Act is not and cannot be automatic. It is discretionary. It will depend on the facts and circumstances of each case taking into account the nature of the mistake. In this connection, it is significant to note that section 216 uses the word 'may', that is, the Income-tax Officer may levy interest. The question whether....