1990 (11) TMI 22

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... st 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 speaking order in respect of charging interest under section 216 of the Act. He, the .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... 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 deleting the interest charged under section 216 of the Income-tax Act, 1961, on .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... 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 chargeable when the assessee files a wrong estimate of advance tax. Interest can be .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ct 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 there was any justification for the estimate or whether it was in fact an understa .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ction 216. But, if it fails to do so, it cannot remand the matter to the Income-tax Officer. " The principles laid down in the aforesaid decisions will govern the instant case. For the reasons aforesaid, the question in this reference be answered in the affirmative and in favour of the assessee and against the Revenue. There will be no order as to costs. BHAGABATI PRASAD BANERJEE J.-I agre .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X