Course of action for charging interest u/s216. - Income Tax - 1749/CBDT

INSTRUCTION NO. 1749/CBDT Dated: February 18, 1987 Section(s) Referred: 216 Statute: Income - Tax Act, 1961 It has come to the notice of the Board that inspite of Board's Instruction No. 1311 (F.No. 400/58/78-ITCC) dated 29th February, 1980, some Income-tax officers do not pass speaking orders while charging interest under section 216 of the Income-tax Act. It has already been pointed out be the Board that the Income-tax Officer's order directing the assessees to pay interest under section 216 should be a speaking order giving his reasons for coming to the conclusion that such interest is leviable so that the Appellate Authorities are able to appreciate the issue involved in the case better. In this connection, it is emphasised that before charging interest under section 216, the assessing officers should afford the assessees an opportunity of being heard and only hereafter they should record their findings and the reasons therefore in the assessment order. Such a course of action will obviate avoidable litigation to some extent. Besides, this will improve the image of the Department before the assessees. 2. These Instructions may be brought to the notice of all the officers working in your charge.