Mittal Bhai Investment (P) Ltd. Vs. Income Tax Officer - Court Judgment

Excerpt:

.....confirmed the levy and charging of interest under section 201(1a) of it act. the interest so charged and confirmed by the ao is bad in law and on facts of the case.5. we have heard the rival submissions and perused the materials available on record. in this case, the learned cit(a) had upheld the charging of interest under section 201(1a) of the act after directing the ao to treat the payment of tds as payment of advance-tax. the learned authorised representative had argued at length that interest charged and raising demand thereof under section 201 is totally bad in law in as much as there was absolutely no order of charging of interest in the assessment order, nor there was any separate order for this purpose. he had placed reliance on the case of uday mistanna bhandar & complex v. cit and ors. (1996) 222 itr 44 (pat) which was affirmed by the hon'ble apex court in the case of cit v. ranchi club ltd. (2001) 247 itr 209 (sc). therefore, the ao was required to pass a speaking order for charging of interest under section 201(1a). similar view was taken by the tribunal, nagpur bench, in the case of vidarbha liquor corporation v. asstt. cit (1999) 64 ttj (nag) 255. therefore,.....

Judgment:

1. This is an appeal filed by the assessee against the order of the learned CIT(A) dt. 1st June, 1998 for the asst. yr. 1995-96.

2. Ground No. 1 of the assessee is general in nature which does not re-quire any adjudication.

3. Ground No. 3 has been withdrawn by the learned Authorised Representative of the assessee during the course of hearing. Thus the same is dismissed as withdrawn.

4. Now we have to decide the Ground No. 2 of the assessees' appeal where the learned CIT(A) had confirmed the levy and charging of interest under Section 201(1A) of IT Act. The interest so charged and confirmed by the AO is bad in law and on facts of the case.

5. We have heard the rival submissions and perused the materials available on record. In this case, the learned CIT(A) had upheld the charging of interest under Section 201(1A) of the Act after directing the AO to treat the payment of TDS as payment of advance-tax. The learned Authorised Representative had argued at length that interest charged and raising demand thereof under Section 201 is totally bad in law in as much as there was absolutely no order of charging of interest in the assessment order, nor there was any separate order for this purpose. He had placed reliance on the case of Uday Mistanna Bhandar & Complex v. CIT and Ors. (1996) 222 ITR 44 (Pat) which was affirmed by the Hon'ble apex Court in the case of CIT v. Ranchi Club Ltd. (2001) 247 ITR 209 (SC). Therefore, the AO was required to pass a speaking order for charging of interest under Section 201(1A). Similar view was taken by the Tribunal, Nagpur Bench, in the case of Vidarbha Liquor Corporation v. Asstt. CIT (1999) 64 TTJ (Nag) 255. Therefore, we are of the opinion that the AO should have passed a speaking order in the assessment order itself or he should have passed a separate order for charging of interest under Section 201(1A) after treating the assessee as defaulter under Section 201 of the Act. Section 246A(1)(ha) provides for separate appeal before the learned CIT(A) under Section 201 of the Act. Therefore, the orders of the lower authorities are set aside and the interest charged under Section 201(1A) is hereby deleted.