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2014 (8) TMI 906 - HC - Income TaxLevy of interest u/s 217(1A) - Interest payable by assessee when no estimate made. - Whether the Tribunal was correct in deleting the interest levied by the AO u/s 217(1A) – Held that:- At the time of original assessment u/s 143(3), the AO had directed charging of interest u/s 201 and 217 - The computation form also referred to and computed interest u/s 217 - the AO had the right to reconsider the question of levy of interest u/s 217 and also examine and state under which sub-section interest was leviable - Right to correct and modify the assessment order was granted and allowed by the first appellate authority vide order dated 24th July, 1992 - Section 217(1) and (1A) both use the expression “on the making of the assessment” - the interest could be imposed after income of an assessee stands computed pursuant to the assessment - The interest component had to be calculated in the computation form - The computation form was/is not the assessment order, but quantifies the tax demand/tax payable, interest payable under different sections by the assessee or in case of refund, refund and interest payable by the Revenue - relying upon Kalyankumar Ray vs. CIT [1991 (8) TMI 291 - SUPREME COURT] - the assessment order dated 22nd March, 1991, had specifically directed levy of interest u/s 217 of the Act and did not specify the sub-section under which the interest should be charged - The direction to specify the sub-section could be read in the order dated 24th July, 1992, when it was directed by the CIT(A) that the AO should pass a speaking order. The order u/s 217 did not form part of the assessment order and it could be made after the regular assessment was made - mere omission on the part of the AO to impose or refer to Section 217 cannot lead to the inference that the AO had waived interest payable without giving reasons for doing so - it follows that the AO did not become functus officio after order of regular assessment was passed and it was permissible and permitted that he could pass an order u/s 217 after he had made regular assessment – the Commissioner was not justified in invoking Section 263 because the AO had failed to mention and state that interest u/s 217 should be levied while passing the regular assessment order - an order u/s 217 should be passed after regular assessment has been made – Decided in favour of Revenue.
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