HARI NARAIN SONI Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) MR . Hari Narain Soni, the petitioner ('the assessee', for short) has challenged the orders dt. 31st March, 1993 and 11th April, 2001 passed by the Dy. CIT, the respondent No. 1. By the former order, dt. 31st March, 1993, the respondent No. 1 had computed the taxable income of the assessee and had charged an interest under Sections 234A, 234B and 234C of the IT Act, 1961 (in short, 'the Act'). By the latter order, dt. 11th April, 2001, the respondent No. 1 had revised the total taxable income of the assessee and had created a demand of Rs. 37,795. A computation sheet attached with order dt. 11th April, 2001 reveals that interest was levied under Sections 234A, 234B and 234C of the Act.

(2.) THE brief facts of the case are that the assessee was carrying on the business of manufacturing of jewellery. According to the assessee, he was regularly submitting his returns to the IT Department. For the asst. yr. 1990 -91, the assessee had declared his income as Rs. 45,000. However, on 17th Sept., 1989, his residential premises were searched by the officers of the IT Department and certain documents were recovered. On the basis of the documents, a notice under Section 143(2) of the Act was issued to the assessee. The assessee had appeared before the respondent No. 1 from time to time. However, vide order dt. 31st March, 1993, the respondent No. 1 had computed the taxable income of Rs. 12,09,130. The respondent No. 1 computed the tax at Rs. 6,30,142 and charged interest at Rs. 4,99,175. However, according to the assessee, in the order dt. 31st March, 1993, no specific direction was given indicating that the interest was being charged under Sections 234A, 234B and 234C of the Act. The order merely directed, 'charge interest as per law'.

(3.) MR . J.K. Ranka, the learned Counsel for the assessee, has raised the following contentions before this Court : firstly, the orders dt. 31st March, 1993 and 11th April, 2001 are non -speaking orders. For, the orders do not specifically mention that the interest is being levied under Sections 234A, 234B and 234C of the Act. Secondly, neither of these two orders reveals the 'satisfaction' of respondent No. 1 for levying the interest under aforementioned sections of the Act. Thirdly, it is not sufficient in the eyes of law for the orders to merely read 'charge interest as per law'. According to the learned Counsel, the requirement of law is that the specific provisions of the Act have to be mentioned and the interest has to be computed and mentioned in the order itself. Fourthly, in case, the orders do not mention the specific provision of law under which the interest is being levied, then interest cannot be levied by the Department. In order to buttress his contentions, the learned Counsel for the assessee has relied upon the cases of Ranchi Club Ltd. v. CIT : (1996) 131 CTR (Pat) 368 : (1996) 217 ITR 72 (Pat), CIT v. Ranchi Club Ltd. : (2000) 164 CTR (SC) 200 : (2001) 247 ITR 209 (SC), Smt. Tej Kumari and Ors. v. CIT and Ors. (2000) 164 CTR (Pat)(FB) 201 : (2001) 247 ITR 210 (Pat)(FB), CIT v. Autolite (India) (P) Ltd. : (2003) 179 CTR (Raj) 341 : (2002) 256 ITR 303 (Raj) and Zakir Hussain v. CIT and Anr. : (2006) 202 CTR (Raj) 40.