9911796707
TMI Blog1982 (2) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... -64 ? " The facts giving rise to this reference are as follows : In the relevant assessment year 1963-64, in the assessment order served by the ITO on the assessee in respect of the said assessment year, there was no mention at all of the levy of penal interest. However, in the notice of demand penal interest was included. It is common ground that the basis on which penal interest could have been levied in this case was that the assessee failed to file an estimate of his income and pay tax on self-assessment on the basis of such assessment as required under s. 212(3) of the said Act. The assessee then filed an application for a rectification of the notice of demand under s. 154 of the said Act on the ground that as the assessment order fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The said sub-s. (1) of s. 217 runs thus: " (1) Where, on making the regular assessment, the Income-tax Officer finds that any such person as is referred to in sub-section (3) of section 212 has not sent the estimate referred to therein, simple interest at the rate of twelve per cent. per annum from the 1st day of April next following the financial year in which the advance tax was payable in accordance with the said sub-section up to the date of the regular assessment shall be payable by the assessee upon the amount equal to the assessed tax as defined in sub-section (5) of section 215. " Sub-s. (3) of s. 212 states, briefly speaking, that any person who has not previously been assessed by way of regular assessment under the said Act or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 44 of the said Act and that the levying of penal interest is not part of regular assessment. We may straightaway point out that as far as the second and third submissions are concerned, the same are clearly beyond the scope of the question referred to us and hence it is not necessary to go into the validity of those submissions at all. The only question referred to us is, whether the ITO waived the levy of penal interest in the circumstances of the case. In fact, that was the only argument advanced before the Tribunal by the learned counsel for the assessee and hence no other question can even arise on the order of the Tribunal. As the second and third submissions, in our view, are clearly beyond the scope of the question referred to us, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n waived. In these circumstances, we utterly fail to see that it could be said that merely because the ITO failed to mention penal interest in the assessment order he had waived the same. In this regard, we find that the view which we are taking finds complete support from the decision of a Division Bench of the Karnataka High Court in CIT v. Executors of the Estate of Late H. H. Rajkuverba Dowager Maharani Saheb of Gondal [1978] 115 ITR 301. It has been held there by the Karnataka High Court that since an order under s. 217 does not form part of an order of assessment, the mere omission on the part of the ITO to refer to the penal interest payable thereunder in the order of assessment cannot lead to the inference that the ITO had waived t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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