Issuance of show cause notice is not a condition precedent before charging interest under Section 217 of the Act.
Patna High Court rightly took the view that issuance of show cause notice is not a condition precedent before charging interest under Section 217 of the Act. The Court took note of the fact that no doubt, the interest charged could be waived on certain grounds and one of these being the assessee showing sufficient cause of purpose. However, the High Court still took the view that show cause notice was not necessary on the ground that this issue is no longer res integra in view of the decision rendered by the Apex Court in Central Provinces Manganese Ore Co. Ltd. Vs. CIT [160 ITR 961], wherein the Court had held that the nature of levy of interest under sub-Section (8) of Section 139 and under Section 215 of the Act was not in the nature of penalty, but by way of compensation and the judgment in the case of Ambica Chemical Products (supra) cited by the learned counsel for the assessee does not look into the matter from this angle, which is only one paragraph judgment which does not discuss the issue in detail.
Moreover, we have ourselves given the benefit of waiver of interest to the assessee in respect of those additions which have been deleted. This would further extend to the travelling expenses of Rs.17,122/- which has been allowed by this order. Thus, substantial relief of interest under Section 217 of the Act stands granted to the assessee. We, thus, hold that no separate notice for levy of interest was required as the requirement of notice was satisfied during the assessment proceedings itself.
Foreign travel expense for business cannot be disallowed merely because no business could be transacted
