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TMI Blog1983 (10) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... mitation. 2. Against this finding, the assessee is in appeal before us. Shri Sarkari, for the assessee, submitted that the ITO had not given any finding regarding the levy of interest in the assessment order. He submitted that such a finding was necessary before interest under section 216 could be levied. He pointed out that even in the draft assessment order no reference was made to interest under section 216. He further pointed out that the ITO had not taken any proceedings under section 273 of the Act for levy of penalty. Relying on a decision of the Cochin Bench of the Tribunal in the case of Alapat Bros. [IT Appeal No. 391 (Coch.) of 1979, dated 22-6-1981], he submitted that the levy of interest is not mandatory at all. The ITO has to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have given above and then gave a finding that the assessee had underestimated the instalments for June and September and, therefore, interest under section 216 has to be charged. As we stated earlier, the Commissioner (Appeals) held that it was barred by limitation. 5. We are of the opinion that the departmental appeal has to be allowed. The Commissioner (Appeals) and the assessee had proceeded on the assumption that the levy of interest under section 216 is part and parcel of the assessment proceedings. If interest was not levied in the assessment order, then it has to be treated as an omission or that the ITO after having applied his mind had decided not to levy the interest. Both these inferences are not correct. Merely because no refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the regular assessment is determined and the amount of tax deductible, is adjusted. Moreover, the High Court pointed out that if an order passed under section 215, 216 or 217 formed part of an order of assessment, it would be appealable under section 246(c) of the Act itself and there would have been no need to enact section 246(m) providing for appeal against an order under section 216 only. On this basis, it is very clear to us that an order under section 216 does not form part of an order of assessment and further, the Karnataka High Court pointed out, it has to be passed only after the regular assessment is made. On the basis of this authority, it is clear that an order under section 216 is a separate order. Further, it is an order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings would not be applicable. This is not a rectification proceeding either. Therefore, the time limit for rectification proceedings also would not apply. As a matter of fact, there is no time limit fixed at all. Therefore, it cannot be said that the order is barred by limitation. In this connection, we may refer to the decision of the Bombay High Court in the case of Chimanram Motilal (P.) Ltd. v. CIT [1983] 140 ITR 809. They were dealing with a case where there was a delay in passing the penalty order under section 28(1)(c) of the Indian Income-tax Act, 1922 ('the 1922 Act'). Pointing out that the statute did not place any time limit for passing the order, the High Court rejected the assessee's contention therein that the order had to be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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