Law: Income Tax Act, 1961

Section: 156,234A,234B,234C

(a) Income-tax---Return---Advance tax---Interest---Notice of demand---Defaults in furnishing return or in payment of advance tax---Levy of interest under S.234-A, 234-B or 234-C---No specific order levying interest in assessment order---Interest cannot be levied through notice of demand---Indian Income Tax Act, 1961, Ss. 156, 234-A, 234-B & 234-C. (b) Income-tax--- ----Return---Advance tax---Interest---Writ---Levy of interest under S.234-A, 234-B or 234-C---No appeal provided by statute against such levy---Writ petition maintainable against such levy---Indian Income Tax Act, 1961, Ss.234-A, 234-B & 234-C---Constitution of India, Art.226. (c) Income-tax--- ----Return---Advance tax---Interest---Levy of interest under Ss.234-A & 234-B---Interest whether liable to be charged on returned income or assessed income---Matter to be referred to larger Bench---Indian Income Tax Act, 1961, Ss.234-A & 234-B. From a bare reading of section 156 of the Income Tax Act, 1961, it is clear that the notice of demand claiming interest can be issued only when there is a specific order in the assessment order, levying interest. To use the expression "charge interest, if any" or charge "charge interest as per the rules" cannot be read to mean that the Assessing Officer has passed orders to "charge interest under all the aforesaid sections". The order to charge interest has to be specific and clear, as for that matter, any order to charge any tax, penalty or fine. The assessee must be made to know that the Assessing Officer after applying his mind has ordered charging of interest and under which section of the Act. A notice of demand is somewhat like a decree in a civil suit which must follow the order. When a does not specify any amount to be charged under any particular section, the decree cannot contain any such amount. Similarly, when the assessment order is silent on whether any interest is leviable, the notice of demand under section 156 of the Act cannot go beyond the assessment order and the assessee cannot be served with any such notice demanding interest. CIT v. Wiliard India Ltd. (1993) 202 ITR 423 (Cal.); CIT v. Namdang Tea Co. India Ltd. (1993) 202 ITR 414…

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