TMI Blog2002 (11) TMI 259X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Rs. 2,403 as PF and ESI on the ground of being paid during the year but allowed as deduction in earlier year. 6. That under the facts and circumstances of the case, the lower authorities grossly erred in law as well as on merits in adding Rs. 22,185 on the ground that it is the bonus for asst. yr. 1988-89 which has already been allowed as deduction in the asst. yr. 1988-89. 7. That under the facts and circumstances of the case, the lower authorities erred in adding the cash credits of Rs. 10,000 in the name of Sh. Har Gopal and Rs. 10,000 in the name of Sh. G.S. Grover under s. 68 of the IT Act, 1961." 2. At the time of hearing, the learned counsel stated that he was not pressing for our consideration ground Nos. 1, 2 and 4. These are accordingly rejected. 3. As regards ground No. 3 in the appeal, we have perused the orders passed by the tax authorities and do note that the CIT(A) by means of an ex parte order observed that the payment was in the nature of penalty and the disallowance made by the AO was to be confirmed. As against this, the stand of the assessee is that it is the payment of additional sales-tax and not penalty. The parties, however, agreed and stated be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o summon the record to enable us to verify the stand taken on behalf of the assessee but on the subsequent and final date of hearing i.e., 2nd April, 2002, the learned Departmental Representative expressed his inability to produce the record on the ground that it was old and not readily traceable. 10. In view of the facts stated aforesaid, we feel that the matter should be restored back to the file of the AO strictly in the interest of justice and if on verification of the earlier record by the AO it transpires that the AO had raised queries in respect of the two cash credits then probably nothing remains to be done on his part and the addition is to be repeated. In case what the assessee states turns out to be correct, their the AO is directed to re-examine the matter de novo on merits. Under these circumstances, the assessee would be entitled to adduce evidence to discharge the onus that lies on it under s. 68. 11. During the course of hearing of this appeal, an additional ground was filed and this read as under: "That under the facts and circumstances of the case, no interest under ss. 234A and 234B should have been charged in view of the fact that no order for charging th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aforesaid judgment, their Lordships had taken the view that levy of interest was mandatory and the assessee could not now contend that a formal order was required. 16. In reply, the learned counsel for the assessee contended that in the present case, the specific requirements laid down in the case of Kalyan Kumar Ray had not been fulfilled since : 1. There was no order for charging interest; 2. The demand notice was vague and did not contain any observation or calculation; and 3. The assessee had not been intimated as to whether any interest had been charged and if so under which section. 17. We may mention that during the course of hearing the assessee s counsel placed on record a photocopy of the notice of demand and a perusal thereof shows that there is no mention of any interest figure. Nothing has been brought to our notice about any calculation sheet having been provided to the assessee since a copy thereof has not been given to us from the side of the assessee and the record of the AO has not been produced before us for verification although the learned Departmental Representative was specifically asked to do so. 18. As regards the judgment of the Hon ble Suprem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Ranchi Club Ltd. vs. CIT (1996) 131 CTR (Pat) 368 : (1996) 217 ITR 72 (Pat) and Uday Mistanna Bhandar Complex vs. CIT (1997) 137 CTR (Pat) 376 : (1996) 222 ITR 44 (Pat) have been affirmed. In Uday Mistanna Bhandar and Complex, while analysing the provisions of s 234A, 234B and 234C vis-a-vis s. 156 of the Act, it was held that notice of demand claiming interest can be issued only where there is order in the assessment order levying interest. This view has been upheld by the apex Court in Ranchi Club Ltd. It is pertinent to note that a Full Bench of the Patna High Court in Smt. Tej Kumari Ors. vs. CIT Ors. (2000) 164 CTR (Pat)(FB) 201 : (2001) 247 ITR 210 (Pat)(FB) has again reiterated the view taken by the Division Benches in the aforenoted cases Admittedly, in the present case there is no direction in the assessment order for charging of interest under s. 234A, 234B of the Act. In view of the aforenoted authoritative pronouncements, no question of law, much less a substantial question of law, arises from the order of the Tribunal." 21. It is important to note that their Lordships have stressed on a notice of demand, which includes/mentions the amount of interest with a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epartmental Representative and these being the judgment of the Hon ble Kerala High Court in the case of CIT vs. Malayala Manorama Company Ltd. (2002) 172 CTR (Ker) 316 : (2002) 253 ITR 791 (Ker) and the other being the judgment of the Hon ble Supreme Court in the case of Kalwa Devadattam Ors. vs.Unionof India Ors. (1963) 49 ITR 165 (SC). A close reading of these judgments shows that the points at issue are entirely different since in the matter before the Kerala High Court, the issue was whether failure to levy interest while completing a regular assessment could be set right by undertaking a rectification. Their Lordships took the view on the aforesaid facts that liability to pay interest was automatic and the same arose by operation of law and, therefore, rectification was permissible. In the case before us, we are dealing with the levy of interest in a regular assessment and in the case of Ranchi Club Ltd., the Supreme Court has taken the view that the levy cannot be raised without application of mind on the part of the AO as reflected in the assessment order read along with the notice of demand. 25. Similarly in the case of Kalwa Devadattam Ors., the issue was as to wha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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