COMMISSIONER OF INCOME TAX Vs. LAXMI TRADING COMPANY

JUDGEMENT

(1.) THE Tribunal has referred the following question for our opinion under Section 256(1) of the Income-tax Act, 1961 :

(2.) IN this reference, we are concerned with the assessment year 1964-65. The assessee was assessed for the said assessment year, but no order was passed in respect of charging of interest. IN fact, the INcome-tax Officer never adverted to this aspect of the matter. Later, the INcome-tax Officer took steps under Section 154 of the INcome-tax Act to rectify the error committed by him. After notice to the assessee, the INcome-tax Officer assessed interest payable by the assessee at Rs. 1,352 and ordered payment of interest accordingly. The assessee appealed to the Appellate Assistant Commissioner and challenged the jurisdiction of the INcome-tax Officer to take recourse to Section 154 of the Act. The stand of the assessee was that the INcome-tax Officer must be deemed to have waived charging of interest. The submission of the assessee carried weight before the Appellate Assistant Commissioner. The appeal was allowed and the order of rectification was cancelled. The Revenue being aggrieved by the order of the Appellate Assistant Commissioner filed an appeal before the Appellate Tribunal which affirmed the order of the Appellate Assistant Commissioner. Hence, the present reference before us.