9911796707
TMI Blog1985 (5) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. "Interest under section 139(8) 630 under section 215/217 870" On account of the rectification order the amount of both the interests got reduced to Rs. 570 and Rs. 790. Apart from the change in the quantum of interest payable in the rectification application the assessee had pointed out another mistake apparent from record in paragraph 2, quoted below, with which we are concerned : "2. Interest under sections 139(8) and 215/217 has been charged without following the proper procedure. The High Court of Karnataka has held in its order dated 5-2-1981 that penal interest cannot be charged as a matter of routine. The ITO must issue a notice to the assessee proposing to charge interest and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3, dated 19-3-1984]. The revenue, on the other hand, relied on the orders of the authorities below and contended that there was no mistake apparent from record. 3. For deciding the issue before us, we may begin by observing that the issue has arisen on the basis of an application under section 154 dated 10-1-1983 moved by the assessee pointing out certain mistakes apparent from record. We are concerned with the mistake pointed out in paragraph 2 quoted above. It is a first principle that in rectification proceedings the decision will have to be made only on the issue raised and not on any other issue, which might go in favour of the assessee and let him succeed in his request for rectification. Unfortunately for the assessee there is a co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to be passed by the ITO to give effect to section 217 of the Act." The Madras High Court has noted in CIT v. City Palayacot Co. [1980] 122 ITR 430 at pages 445-446 that the Kerala High Court has taken a view similar to that of the Karnataka High Court in CIT v. Cochin-Malabar Estates Ltd. [1974] 97 ITR 466 and, therefore, there was a conflict of opinion between the High Courts. The Madras High Court agreed with the Kerala and the Karnataka High Courts decisions. If there is to be no formal order by the ITO it is implied that there is no need for affording an opportunity of being heard to the assessee about why interest should not be charged ; nor can the procedure followed by him be held to be a mere mechanical computation. In the inst ..... X X X X Extracts X X X X X X X X Extracts X X X X
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