TMI Blog1985 (8) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... ') though not specifically provided for in section 246 of the Act was maintainable in view of the judgment of the Calcutta High Court in the case of CIT v. Anglo Indian Jute Mills Co. Ltd. [1980] 124 ITR 384. He further found that under the facts and circumstances of the case, the ITO should have waived interest under rule 40 of the Income-tax Rules, 1962. Accordingly, the interest charged was deleted by the Commissioner (Appeals). Aggrieved by the said order of the Commissioner (Appeals), the department has come up in appeal. 2. The contention of the learned departmental representative is that appeal on the point of charging interest under section 215 was not maintainable before the Commissioner (Appeals) and as such, the Commissioner (A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made an exception to the right of appeal of the assessee provided in clause (c) of section 246(1). He placed reliance upon the observations of the Hon'ble Calcutta High Court in the case of CIT v. Lalit Prasad Rohini Kumar [1979] 117 ITR 603 reproduced by the High Court in their another judgment in the case of CIT v. New Swadeshi Mills of Ahmedabad Ltd. [1984] 147 ITR 163 which are as under: "... The ITO has the power and indeed the duty to charge interest under the circumstances mentioned in sections 215 and 217 of the Act, but the ITO has the discretion to waive or reduce such interest in the circumstances mentioned in rule 40 of the Income-tax Rules, 1962. Such discretion, in our opinion, in the facts and circumstances of the section r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and proper exercise of jurisdiction vested in the authority by law. Sub-section (4) of section 215 lays down that in such cases and under such circumstances as may be prescribed, the ITO may reduce or waive the interest payable by the assessee under this section. Occasion for exercise of this discretion would arise only when the assessee is called upon by the ITO to explain as to why interest under section 215 should not be charged. What is automatic is only that by mere calculation of the advance tax paid and the tax assessed the ITO can come to a finding that section 215 is applicable but thereby he cannot mechanically levy interest unless he calls upon the assessee to explain as to why interest should not be levied. Such requirement is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of interest in appeal. Despite the fact that no appeal has been specifically provided for in section 246 against an order passed under section 215, all the High Courts have held that an appeal does lie against an order under section 215 under certain circumstances. One of such circumstances can well be where the order has been passed in violation of natural justice, namely, that no opportunity was given to the assessee to show cause as to why interest should not be charged and thereby the ITO had no occasion to exercise his discretion under rule 40 read with section 215(4). 5. Once the appeal is held maintainable, the appellate authority is ceased of the matter and is entitled to consider it on merit if there are sufficient facts on rec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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