9911796707
TMI Blog1983 (5) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... be charged according to law. 3. The CIT (A) noted in the impugned order that the assessee preferred an appeal against charging of interest u/s 216. It was submitted that the ITO has charged the interest at Rs. 61,200, but no order was passed by the ITO in the matter of his finding to justify the levy of interest. It was also submitted the ITO vide his letter dt. 11th October, 1979, sent a tax calculation sheet wherein the interest u/s 216 was included and that this was only in reply to the request of the assessee in the matter of inclusion of interest u/s 216. It was also submitted before the CIT(A) that for the purpose of charging interest u/s 216, it was necessary that the ITO should record his findings in a separate order justifying l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le emphasising the ratio of the decision in the case of Vazir Sultan Tobacco Co. Ltd. Amongst other things, it was noted that the finding regarding under-estimation of advance-tax is a necessary pre-condition to charge interest and that the interest would be payable only when the advance-tax is under-estimated. It is submitted further that specific order and specific finding by the ITO were necessary as charging of interest u/s 216 cannot be made automatic. It is further submitted that the order u/s 216 is appealable and, therefore, all the more specific order regarding finding is necessary. It is pointed out that in the instant case, the ITO has simply given a copy of the calculation and not a word of any finding and, therefore, under such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction, the ITO ordered that interest had to be charged. True order u/s 216 is appealable and, therefore, in our opinion, the findings of the ITO that there was an under-estimate of advance-tax etc. would be a sine qua non before charging of interest, as is in the instant case. The CIT (A) has accepted the plea taken by the assessee that it was necessary that the ITO should record his finding in a separate order justifying levy of interest, which order is also appealable. The assessee's plea found favour with the CIT (A). 8. Again in this connection, we may refer to a decision of the Hon'ble Karnataka High Court in the case of CIT vs. Nanda Theatres, Bangalore Ors. (1978) 115 ITR 301 (Kar). The facts of that Karnataka case were that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Hon'ble Supreme Court in the case of Kapur Ch. Shrimal vs. CIT (1981) 24 CTR (SC) 345 : (1981) 131 ITR 451 (SC). It was held in that decided case that u/s 25A of the old IT Act, the ITO is bound to hold an enquiry into the claim of partition in an HUF if it is made before him and to record a finding thereof and if no such finding is recorded, s. 25A (3) becomes attracted and the assessment may be liable to be set aside in appeal as it is in clear violation of the procedure prescribed. The Hon'ble Supreme Court noted that when the Tribunal holds that such an assessment has to be liable to be set aside, the duty of the Tribunal does not end with making a declaration that the assessment is illegal and that the proper order to be passed in s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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