1984 (3) TMI 131

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....154 of the Act on 7-7-1977. By his order dated 27-4-1981 the ITO rectified the assessment and simultaneously directed the levy of interest under section 217(1A). The said direction has been quashed on appeal by the AAC relying upon a decision of the Kerala High Court in Mohammed Kunhi v. Addl. ITO [1967] 66 ITR 250. The revenue has come up in second appeal before us. 3. We have heard the representatives of the parties at length in this appeal. So far as the reliance upon the decision of the Kerala High Court in Mohammed Kunhi's case by the AAC is concerned, we are of the considered opinion that the present case is distinguishable. What had happened in that case was that in the original assessment the ITO had not charged any interest unde....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....n the first instance in that case, it does not lay down an absolute rule of law that interest should be deemed to have been waived in all similar cases. Each case would have to depend on its facts and circumstances. The crucial thing to note in this behalf is that even at the time of original assessment the ITO had passed an order that interest may be charged according to law and ordinarily interest under section 217(1A) has to be charged and not waived. 4. Faced with this situation, the representative of the assessee contended that the question of levy of interest under section 217(1A) had already been considered and decided by the AAC in the appeal relating to the original assessment and, therefore, could no longer be the subject-matte....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... no specific direction for the levy of interest under section 217(1A), the said interest would not be charged merely by inclusion in the demand notice. Without commenting on the correctness of this view taken by the AAC it is difficult to understand as to how this order can be deemed to have held that the assessee was not liable to pay any interest. All that the AAC did was to delete the levy of interest from the demand notice on the ground that there was no specific direction in the assessment order itself. In other words, had there been a direction that interest might have been leviable, what follows therefrom is that the direction was missed by the ITO. If it was missed then clearly there was a mistake and then there is absolutely no rea....