Interest u/s 234A/ 234B cannot be levied in absence of any mention in Assessment Order

Income Tax Officer Vs. M/s. Heritage Project (ITAT Amritsar)

The conclusion of Hon’ble Supreme Court in the case of CIT Vs. Ranchi Club Ltd. is that in the absence of any specific mention of the Assessing Officer in the assessment order for charging of interest u/s 234A and 234B, no interest would be recovered from the assessee merely by way of a demand notice. We further find that Hon’ble Delhi High Court in the case of CIT Vs. Kishan Lal (HUF) has again followed the order of Hon’ble Supreme Court and has held that in the absence of any direction in the assessment order for charging interest u/s 234A and 234B interest cannot be recovered.

The Hon’ble Court has held that if there is no direction in the original assessment order, no rectification can be made as there is no mistake apparent from record. The case law relied on by Ld. DR is on a different aspect where the Hon’ble Court has said that omission of application of statutory provision is a mistake rectifiable u/s 154 of the Act whereas in the present case the issue is as to whether interest not charged in the original assessment can be rectified or not and the case law of Hon’ble Supreme Court and other case laws are directly on the issue.