TMI Blog1993 (3) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... nal under section 256(1) of the Income-tax Act, 1961 : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in deleting the interest charged under section 216 of the Income-tax Act, 1961 ?" We have heard both sides. The assessee, a limited company, derives income from the manufacture and sale of tea. The dispute relates to the assessment year 1977-78. A not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted the charge of interest. On appeal by the Revenue, the Tribunal confirmed the order of the Commissioner stating that the Inspecting Assistant Commissioner did not pass a speaking order, and did not give reasons for its finding, and that, on the other hand, the Commissioner of Income-tax (Appeals ), after consideration of the facts, concluded that the assessee was not in default. Section 216 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd (ii) in the case referred to in clause (b), for the period during which the payment of advance tax was so deferred. " Obviously, the Inspecting Assistant Commissioner must have thought that clause (a) was attracted in the instant case and there Was underestimation of the tax payable by the assessee and the assessee thereby reduced the amount payable in both the first and, second instalments. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ower to charge interest is discretionary. He appears to have thought that he was bound to charge interest. He has committed a serious error of law. It is true that the Commissioner of Income-tax (Appeals) being the first appellate authority could have considered the facts and circumstances of the case to see whether charging of interest was justified. The Commissioner of Income-tax (Appeals), howe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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