2001 (1) TMI 203 - AT - Income Tax

Summary

Issues Involved:
1. Additional Ground on Interest u/s 234B
2. Appealability of Interest u/s 234B
3. Specific Direction for Charging Interest u/s 234B
4. Basis for Charging Interest u/s 234B

Summary:

1. Additional Ground on Interest u/s 234B:
The Tribunal entertained the additional ground raised by the assessee regarding the deletion of interest charged u/s 234B, citing precedents such as *Ahmedabad Electricity Co. Ltd. vs. CIT* and *Inawo Ltd. vs. CIT*. The Tribunal referenced the judgments of the Hon'ble Supreme Court in *National Thermal Power Co. Ltd. vs. CIT* and *Jute Corporation of India Ltd. vs. CIT & Anr.*, which support the consideration of legal points raised in additional grounds.

2. Appealability of Interest u/s 234B:
The Tribunal held that an appeal against the levy of interest u/s 234B is maintainable if the assessee denies its liability to be assessed in toto, as per the judgment of the Hon'ble Supreme Court in *Central Provinces Manganese Ore Ltd. vs. CIT*. The Tribunal found that the assessee in this case denied its liability for interest u/s 234B, making the appeal maintainable.

3. Specific Direction for Charging Interest u/s 234B:
The Tribunal examined whether interest u/s 234B could be charged without a specific direction in the assessment order. It was noted that the assessment order mentioned that ITNS-150 was enclosed, which specified the interest payable u/s 234B. The Tribunal referred to the judgment of the Hon'ble Supreme Court in *Kalyankumar Ray vs. CIT*, which held that ITNS-150 is an integral part of the assessment order. Thus, the Tribunal concluded that the levy of interest u/s 234B was valid as it was specified in ITNS-150 and accompanied by a detailed calculation sheet.

4. Basis for Charging Interest u/s 234B:
The Tribunal considered whether interest u/s 234B should be charged on the tax on income declared in the return, assessed income, or assessed income excluding certain additions. The Tribunal referenced the judgment of the Hon'ble Patna High Court in *Ranchi Club Ltd. vs. CIT*, affirmed by the Hon'ble Supreme Court, which held that interest u/s 234B is not chargeable on amounts that could not have been anticipated by the assessee. The Tribunal directed the AO to examine the nature of each addition and decide the levy of interest u/s 234B accordingly, following the principles laid down in *Ranchi Club Ltd. vs. CIT*.

Conclusion:
The Tribunal allowed both appeals for statistical purposes, directing the AO to re-examine the levy of interest u/s 234B in light of the principles established in relevant judicial precedents.