No interest can be charged in absence of any mention of charging of interest in assessment order

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HIGH COURT OF JUDICATURE AT ALLAHABAD

INCOME TAX APPEAL No. 48 of 2003

Commissioner Of Income Tax

V/s.

Sarin Chemical Laboratory

Interest u/s. 234A, 234B and 234C cannot be charged in the absence of any mention of charging of interest in assessment order

The High Court observed that in the case of Anjum M. H Ghaswala the Supreme Court has held collection of interest under Section 234A, 234B and 234C of the Act was mandatory. The High Court relied on decision of Dehradun Club Ltd. (ITA No. 15 of 2006) wherein it was held that there is no quarrel with the proposition laid down by the Supreme Court in the case of Anjum M.H Ghaswala but at the same time if the assessment order contained the imposition of interest, only then, a notice of demand of interest could be issued under Section 156 of the Act. Further, the High Court relied on the decision of the Division Bench of this Court in the case of Deep Awadh Hotels P Ltd. wherein it was held that in the absence of any mention of charging of interest in the assessment order, interest cannot be charged by issuing a notice of demand. The High Court was bound by earlier decision given by the Division Bench of this Court, which is based on consideration of two judgments of the Supreme Court in the case of Ranchi Club Ltd. and Anjum M.H Ghaswala. Accordingly, the High Court held that no interest can be charged on the taxpayer, in absence of any mention of charging of interest in the assessment order.