The assessment order did not contain any direction for the payment of interest. The ITAT and the Delhi High Court held that since no direction had actually been given in the assessment order for payment of interest, the case was covered by the decision of the Supreme Court in ‘Commissioner of Income Tax & Ors. v. Ranchi Club Ltd’ [(2001) 247 ITR 209] which merely dismissed the appeal affirming the High Court judgment reported in ‘Ranchi Club Ltd. v. Commissioner of Income Tax’ [(1996) 217 ITR 72]. The Department claimed before the Supreme Court that in view of the decision in ‘Kalyankumar Ray v. Commissioner of Income Tax, West Bengal-IV, Calcutta [1992 Supp (2) SCC 424] interest under Section 234B is part of Form I.T.N.S. 150 which is not only signed by the assessing officer but it is really part of the assessment order itself. HELD by the Supreme Court allowing the appeal:<\/p>\n
It will be seen that under the provisions of Section 234B, the moment an assessee who is liable to pay advance tax has failed to pay such tax or where the advance tax paid by such an assessee is less than 90 per cent of the assessed tax, the assessee becomes liable to pay simple interest at the rate of one per cent for every month or part of the month. The levy of such interest is automatic when the conditions of Section 234B are met. The facts of the present case are squarely covered by the decision contained in Kalyankumar Ray’s case inasmuch as it is undisputed that contained a calculation of interest payable on the tax assessed. This being the case, it is clear that as per the said judgment, this Form must be treated as part of the assessment order in the wider sense in which the expression has to be understood in the context of Section 143, which is referred to in Explanation 1 to Section 234B. This being the case, we set aside the judgment of the High Court and allow the appeal of the Revenue. <\/em><\/p>\n","protected":false},"excerpt":{"rendered":" It will be seen that under the provisions of Section 234B, the moment an assessee who is liable to pay advance tax has failed to pay such tax or where the advance tax paid by such an assessee is less than 90 per cent of the assessed tax, the assessee becomes liable to pay simple interest at the rate of one per cent for every month or part of the month. The levy of such interest is automatic when the conditions of Section 234B are met. The facts of the present case are squarely covered by the decision contained in Kalyankumar Ray\u2019s case inasmuch as it is undisputed that contained a calculation of interest payable on the tax assessed. This being the case, it is clear that as per the said judgment, this Form must be treated as part of the assessment order in the wider sense in which the expression has to be understood in the context of Section 143, which is referred to in Explanation 1 to Section 234B<\/p>\n