COMMISSIONER OF INCOME TAX Vs. SHAH SERVICES

JUDGEMENT

(1.) IN this reference under s. 256(2) of the IT Act, 1961 ('the Act') for the asst. yr. 1984-85, the following question of law has been referred to this Court:

(2.) SHORTLY stated, the facts are that while completing the assessment of the assessee, a registered firm, for the asst yr. 1984-85, the ITO in his order dt. 21st May, 1986 directed to 'charge interest as per law'. Accordingly, in the notice of demand sums of Rs. 11,160 and Rs. 2,923 were included as interest payable under ss. 139(8) and 217 of the Act.

(3.) THE assessee then brought the issue in second appeal before the Tribunal. The Tribunal following the decision in the cases of Mulakh Raj Bimal Kumar vs. ITO 1976 CTR (J&K) 279 : (1977) 107 ITR 383 (J&K) and of Monohar Gidwany vs. CIT (1983) 139 ITR 498 (Cal) Accepted the claim of the assessee with the following remarks: