COMMISSIONER OF INCOME TAX Vs. MAHINDER SINGH

JUDGEMENT

(1.) The Income Tax Officer passed an assessment order for the assessment year 1970-71 in respect of the present assessed on January 30, 1973. The return had been filed on January 19, 1971, showing an income of Rs. 9,962. In that order, no interest was charged under section 217 of the Income Tax Act, 1961. The income of the assessed was from Shankar Housing Corporation and M/s. Mahavir Singh & Co. and the assessment was for Rs. 1,78,693 against the returned income of Rs. 9,962.

(2.) By order dated December 11, 1974, an order was passed under sections 154 and 155 of the Act imposing a demand of Rs. 22,080 under section 217 of the Act. It may be noted that under section 217, interest is imposable when no estimate has been made. The power to waive the interest is set out in rule 40 of the Income Tax Rules, 1962. The Income Tax Officer may reduce or waive the interest. A noteworthy feature of this case was that the income was entirely from two firms and the declared income was only Rs. 9,962. One of the grounds for waiving the interest is delay in making the assessment. The assessment was made more than two years after the return was filed. The delay in making the assessment is not dealt with in the order of review.

(3.) On appeal to the Appellate Assistant Commissioner, the Income Tax Officer's order was upheld, but the Tribunal set aside the same holding That it was not a case covered by section 154. One of the points urged was that there was no mistake in failure to charge interest in the circumstances of the case. This ground was accepted and the Tribunal never actually decided whether there was a mistake or not.