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TMI Blog1985 (11) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... n 154 of the Act for rectification of the assessment was, therefore, initiated. Notices to that effect were issued. After hearing the parties, the Income-tax Officer imposed interest of Rs. 3,051. The assessee being aggrieved by the order of the Income-tax Officer filed an appeal. The Appellate Assistant Commissioner allowed the appeal and set aside the order by which interest had been charged by the Income-tax Officer. In the view of the Appellate Assistant Commissioner, no case for rectification had been made out. The Revenue being aggrieved by the order of the Appellate Assistant Commissioner appealed to the Appellate Tribunal. The Tribunal rejected the appeal observing that the Income-tax Officer must be deemed to have waived payment of interest. It is not in controversy that no mention had been made by the Income-tax Officer in regard to interest. Paragraph 5 in the order of the Tribunal sets out the reasons for rejecting the appeal of the Revenue. It reads as follows "We have considered the facts of the case and we are of the view that the principles decided in the case of S.A.L. Narayan Row v. Ishwarlal Bhagwandas [1965] 57 ITR 149 (SC) are applicable to the present case a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hus be seen that the only question agitated before the Tribunal was whether there was a waiver by the Income-tax Officer in regard to the imposition of interest. The only question, therefore, we have got to decide is whether the non-consideration of the matter regarding levy of interest amounted to waiver or not. In this connection, rule 117A of the Income-tax Rules, 1962, is important. This rule empowers the Incometax Officer to waive levy of interest in certain situations. Rule II 7A reads as follows :- " The Income-tax Officer may reduce or waive the interest payable under section 139 in the cases and in the circumstances mentioned below, namely: (i) where the return of income is furnished by a person who has been treated under section 163 as an agent of a non-resident and is assessed in respect of the latter's income (ii) where the return of income is furnished by an assessee whose only source of income during the relevant previous year is a share in the income of an unregistered firm which has been assessed on its total income in respect of that previous year under clause (b) of section 183 (iii) where the return of income of a deceased individual is furnished by his leg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 of the Act would clearly come into play. Section 154 of the Act lays down that an Incometax Officer may amend an order of assessment with a view to rectify mistake apparent from the record. Even if we were to assume that non-consideration of the question of levy of penal interest is taken or must be taken as waiving the interest, even that could be without jurisdiction because there was no prior approval by the Inspecting Assistant Commissioner. The position in law cannot be placed higher than that. The maximum that the assessee could assert was that the silence of the Incometax officer must be deemed to be speech but in view of the proviso to the provisions of rule 117A of the Income-tax Rules, the Income-tax Officer had no jurisdiction to waive it and the error being apparent it could be certainly rectified. Learned counsel for the Revenue brought to our notice the case of CIT v. Ramjibhai Hirjibhai Sons [1977] 110 ITR 411 (Guj). . The view that we have taken finds ample support from the aforesaid decision of the Gujarat High Court. Learned counsel for the assessee placed reliance upon the decision of the Supreme Court in the case of S. A. L. Narayan Row v. Ishwarlal Bhag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not the question before us. The question falling for consideration before us as before the Tribunal was whether the Income-tax Officer will be deemed to have waived charging of interest. That is the only question before us. The question falling for consideration before this court in the case of Veena Theatres [1977] 109 ITR 748 was thus different from the one before us. It has no relevance for our purposes. The case of Premchand Sitanath Roy v. Addl. CIT [1977] 109 ITR 751 (Cal) is really a decision against the assessee. In that case, the position was that in terms of the proviso to section 139(1) of the Act, there was an obligation to charge interest on the assessee for late filing of the return. Interest had not been charged in that case. Therefore, their Lordships of the Calcutta High Court laid down that the liability can only be exonerated in terms of sub-section (8) of section 139 of the Act and that exercise of discretion must also be in accordance with rule 117A of the Rules. In that case, Sabyasachi Mukharji J. observed that there was no evidence that the Income-tax Officer had exercised discretion or applied his mind to the facts of the case. The same is the situation b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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