High Court Of Gauhati
River Valley Tea Co. (P) Ltd. vs. CIT & Ors.
Section Assam Agrl. IT 20C(5)
Asst. Year 1987-88
P.G. Agarwal, J.
Civil Rule No. 379 of 1998
27th October, 2003
Counsel Appeared :
V.K. Bhatra, for the Petitioner : Government Advocate, for the Respondents
JUDGMENT
P.G. Agarwal, J. :
The petitioner before us is an assessee under the Assam Agrl. IT Act, 1939 (for short “the Act”). For the asst. yr. 1987-88, the petitioner submitted his return whereby the competent authority assessed the income and tax thereupon. So far the assessment of the income and the tax are concerned, these are not under challenge in this writ petition. Further, the assessing authority levied an interest of Rs. 2,32,623 in the assessment order dt. 7th Sept., 1996, and the same has been challenged in this writ petition stating that the interest levied is in violation of sub-cl. (5) of s. 20C of the Act (since repealed).
The respondent authorities have not filed any affidavit in opposition. Heard learned counsel for both sides. There is no dispute at the Bar that the provisions of s. 20C of the Act (since repealed) are applicable in the present case as the matter relates to the period during which the said provisions were applicable.
Mr. Bhatra, learned counsel for the petitioner, has submitted that the provisions of s. 20C of the Act are more or less identical with the provisions of s. 234B of the IT Act, 1961, and the requirement of law is that if the AO intends to levy interest he must pass a specific order giving the grounds for levying the interest and also state the period for which the interest has been levied and at what rate, etc., etc.
We have perused the impugned assessment order wherein it is merely stated “add interest so and so …” There is absolutely no order as to why the interest is being levied and for which period.
In the case of Ranchi Club Ltd. vs. CIT (1996) 131 CTR (Pat) 368 : (1996) 217 ITR 72 (Pat), the Patna High Court held that in the absence of a specific and clear order by the AO for charging interest under s. 234B of the IT Act, 1961, interest cannot be charged. The matter was challenged before the apex Court in CIT vs. Ranchi Club Ltd. (2000) 164 CTR (SC) 200 : (2001) 247 ITR 209 (SC) and the apex Court refused to interfere in the matter.
In the circumstances and the fact that the provisions of sub-cl. (5) of s. 20C of the Act were more or less identical with s. 234B of the IT Act, we hold that in the absence of any specific order regarding the interest levied the impugned order is bad in law and the same is hereby quashed.
The civil rule stands allowed.
[Citation : 266 ITR 383]
