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TMI Blog2012 (6) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... 3;s business - expenditure allowed - Decided in favor of assessee. Requirement of giving a notice of hearing before charging of the interest u/s 217 - Held that:- Issuance of show cause notice is not a condition precedent before charging interest u/s 217 as the requirement of notice was satisfied during the assessment proceedings itself. - ITA No.157 of 2011 - - - Dated:- 1-6-2012 - MR. JUSTICE M.L. MEHTA, A.K. SIKRI, JJ. For Appellant : Mr. P.L. Juneja, Advocate. For Respondent: Mr. Sanjeev Sabharwal, Sr. Standing Counsel. 1. The appeal of the review petitioner was decided by this Bench vide judgment dated 08.8.2011. In the very first paragraph, disallowance, which was made by the Assessing Officer, was taken note ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wo issues were also adverted to and may be somehow wrong impression was gathered at the time of arguments that they have been given up. When we pointed out this aspect to the learned counsel for the Revenue-Department, he agreed that instead of going into controversy as to whether the same were pressed at the time of hearing or not, he would have no objection if these are decided on merits. Arguments on these issues were also heard and the same were considered on merits. We, thus, proceed to frame the following two substantial questions of law: (a) Whether any legal error is committed by the Income Tax Appellate Tribunal (hereinafter referred to as the Tribunal‟) in affirming the disallowance of ₹ 17,122/- allegedly incurred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e way advantageous to the actual business engaged by the assessee company during the year. It is stated tht he is an expert in brass and the assessee was contemplated doing business in brass and, therefore, his foreign travel expenses were met by the assessee company. Even otherwise, the assessee has not established that he is an expert in brass sheet or that any agreement was entered into between him and the assessee. 7. The Tribunal affirmed this finding observing as under: The I.T.O. disallowed foreign travel expenses of ₹ 17,122/- to Shri Pawan Goel. Shri Pawan Goel for whom the expenditure is claimed, is neither a Director not the assessee. The nexus of the expenditure with the business was not established with any amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e determinative factor. It is not also necessary that the expenditure on Mr. Pawan Geol could be claimed by the assessee only if he was a Director or an employee. The relevant factor was as to whether he was sent by the assessee abroad in connection with the business of the assessee. In order to prove this, the assessee had produced the resolution of the company authorizing Mr. Sunil Kumar to undertake the said foreign travel. The assessee had even filed the affidavit to this effect. These documents really clinch the issue, which would indicate that Mr. Sunil Kumar had undertaken the travel solely for the purpose of the assessee‟s business and for which purpose, he was duly authorized by the Board of Directors of the assessee. This ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should be given a notice of hearing as has been held by the Andhra Pradesh High Court in the case of Ambica Chemical Products Vs. ITO [191 ITR 382] against which Special Leave Petition filed in the Supreme Court was also dismissed which was reported as 187 ITR (Statutes) 162. According to the Department, there is no requirement of giving a notice of hearing before charging of the interest under Section 217 of the Act for the reason that there is no provision under the Act which provides for giving any separate notice for levy of the interest since interest is not a penalty and hence, the notice is not required to be issued. 14. Mr. Sanjeev Sabharwal, learned counsel for the Revenue relied upon the judgment of Patna High Court in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court took note of the fact that no doubt, the interest charged could be waived on certain grounds and one of these being the assessee showing sufficient cause of purpose. However, the High Court still took the view that show cause notice was not necessary on the ground that this issue is no longer res integra in view of the decision rendered by the Apex Court in Central Provinces Manganese Ore Co. Ltd. Vs. CIT [160 ITR 961], wherein the Court had held that the nature of levy of interest under sub-Section (8) of Section 139 and under Section 215 of the Act was not in the nature of penalty, but by way of compensation and the judgment in the case of Ambica Chemical Products (supra) cited by the learned counsel for the assessee does not look ..... X X X X Extracts X X X X X X X X Extracts X X X X
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