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Section 154 of the Income-tax Act, 1961 - Rectification of mistake - Apparent from record - Assessment year 1968-69 - Whether even where penalty proceedings under section 273(a) were dropped it could not be said that section 216 had no application and, that, therefore, levy of interest under section 216 was a mistake requiring rectification under section 154 - Held, yes FACTS For the assessment year 1968-69, the ITO completed the assessment and charged interest under section 216. Penalty proceedings under section 273(a) were also initiated but were subsequently dropped. The assessee did not file an appeal against charging of interest under section 216. When penalty proceedings under section 273(a)were dropped by the ITO, the assessee filed an application for rectification under section 154. The application was rejected by the ITO. On second appeal, the Tribunal accepted the assessee's contention that penalty proceedings having been dropped, section 216 had no application and as such levy of interest under section 216 was a mistake rectifiable under section 154. HELD It may be that it is possible in a particular case to come to the conclusion that because penalty proceedings under section 273(a) have been dropped interest under section 216 is not chargeable. However, it would require argument to convince that it would be so. The provisions in the two sections, to say the least, are not in pari materia. The phraseology used is different. It was, therefore, not possible to accept that charging of interest in the facts of the case amounted to an obvious and glaring mistake so that it could be rectified in the proceedings under section 154. CASE REFERRED TO CIT v. Nagri Mills Ltd. [1987] 166 ITR 292 (Guj.). Dr. V. Balsubramanian, J.P. Devadhar and K.C. Sidhwa for the Applicant. N.A. Dalvi for the Respondent. JUDGMENT Sugla, J.-The question of law raised in this reference at the instance of the department reads thus: "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that since penalty proceedings under section 273( a) of the Income-tax Act, 1961 have been dropped by the Income-tax Officer, section 216 which provides for…

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