TMI Blog1993 (6) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... only ground in the appeal is that the CIT (Appeals) was not justified in cancelling the interest of Rs. 11,236 charged under section 216 of the Income-tax Act, 1961. 3. The assessment was completed on 11-10-1989 under section 143(3) of the Act on a total income of Rs. 3,65,690. At the end of the assessment order the Assessing Officer observed as under : "Assessed under section 143(3) as above. Issue demand notice and challan. Sd/-(J.C. Pegu) Assistant Commissioner of Income-tax, Circle-II, Guwahati." It would be seen from the above that there was no mention of any levy of interest under section 216 of the Act in the assessment order. However, in the demand notice, interest of Rs. 11,236 was charged under section 216. Here also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terest under section 216 and go into the mens rea of the assessee in under-estimating the advance-tax payable by him and to reach a proper conclusion regarding the levy. Relying on this letter it was submitted that since the Assessing Officer has not given any reason for the levy, the CIT(A) was right in cancelling the levy without restoring the issue to the Assessing Officer for a fresh order. Reliance was also placed on the decision of the Calcutta High Court relied on by the CIT(A) and also on the case of Hindusthan Sanitary Ware Industries Ltd. v. CIT [1978] 114 ITR 85. 7. On a careful consideration of the rival submissions, we are of the view that there is no merit in the appeal. Section 216 of the Act provides for the levy of inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eciation of the facts, the reasons supporting his conclusions should be recorded in the assessment order itself so that an appellate authority can judge whether the Income-tax Officer's finding is justified on the facts of the case. Letter : F.No. 400/58/78-ITCC, dated 29-2-1980." In the case of Hindusthan Sanitary Ware Industries Ltd the Hon'ble Calcutta High Court was considering the case of levy of interest under section 216. The order of the Assessing Officer did not show any application of mind to the question. The Tribunal had taken the view that there was nothing on record to show that before charging interest the Assessing Officer had applied his mind to the facts of the case. However, it ordered a fresh consideration of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l was right in setting aside the order of the Assessing Officer charging interest and in sending back the matter to him for fresh consideration. This question was discussed by the Hon'ble Calcutta High Court at page 26 of the report. After referring to the earlier decision of the Calcutta High Court in Hindusthan Sanitary Ware Industries Ltd.'s case at page 28 of the report, their Lordships held as under : " It is no doubt true that the Tribunal has the power and jurisdiction to send the matter back to the Assessing Officer after setting aside his order to consider the issue de novo if the order is held to be bad being in contravention of the directory provision of the Act. The Tribunal may also direct the Assessing Officer to ascertain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as notjustified." [Emphasis supplied] 8. It will be seen that the Hon'ble Calcutta High Court has deprecated the practice of sending back the question of chargeability of interest under section 216 when there were no materials either in the order of the Assessing Officer or before the Tribunal itself to show whether the levy of interest was justified or not. In the present case the situation is the same. The assessment order does not contain any reference to the provisions of section 216. The demand notice also does not contain any materials to show whether the assessee had under-estimated the advance-tax payable by him and thereby reduced the first two instalments of advance-tax. There are no materials on record to show that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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