appeal by assessee is directed against order of Commissioner as passed under section 263 of Income-tax Act, 1961 ('the Act') on 14-3-1985. 2. Commissioner noted that ITO did not charge interest under section 217 of Act, when assessment for assessment year 1981-82 was completed. He initiated action under section 263 which was objected by assessee. assessee submitted that after considering tax payable, tax deducted at source, etc., it would be found that no interest was chargeable under section 217 as alleged. assessee also submitted that action under section 263 cannot be taken as assessment order was passed by ITO after considering instructions of IAC under section 144B of Act. It was also contended by assessee that order of ITO was not erroneous or prejudicial to interest of revenue. It was urged, therefore, that proceedings under section 263 should be dropped. 3. Commissioner noted that section 217 has to be read with section 215(5) of Act and assessed tax would be tax determined on basis of regular assessment as reduced by tax deducted at source. He found no force in submissions made by assessee in this regard. In respect of point of jurisdiction after assessment was completed under section 144B , Commissioner was of view that after clarification made by Taxation Laws (Amendment) Act, 1984, this contention of assessee has not force. He also considered other objection that order of ITO was not erroneous or prejudicial to interest of revenue. Commissioner found that since ITO failed to charge interest under section 217 while passing order under section 143(3) /144B of Act without giving any reason, order of ITO was erroneous and prejudicial to interest of revenue. 4. Commissioner took into account ration of decisions in CIT v. Cochin-Malabar Estates Ltd. [1974] 97 ITR 466 (Ker.), Premchand Sitanath Roy v . Addl. CIT [1977] 109 ITR 751 (Cal.), Singho Mica Minning Co. Ltd. v. CIT [1978] 111 ITR 231 (Cal.), Addl. CIT v. Saraya Distillery [1978] 115 ITR 34 (All.) n d CIT v. City Palayacot Co. [1980] 122 ITR 430 (Mad.). He, accordingly, cancelled order of assessment made under section 143(3) with direction that he should make fresh assessment after giving assessee opportunity of being heard. Hence, this appeal by assessee. 5. It is submitted on behalf of assessee that Commissioner acted wrongly in initiating proceedings under section 263 and to cancel assessment on grounds noted in order. In fact, submissions made before Commissioner have been incorporated in grounds of appeal mostly. It is also appealed by assessee that Commissioner erred in cancelling whole assessment and in directing ITO to make fresh assessment and in circumstances Commissioner has exceeded his powers conferred by section 263 and in circumstances, his order requires to be quashed. It is assessee's submissions that even otherwise, direction of Commissioner should confine only to point contained in show- cause notice and, therefore, order of Commissioner on facts of case, cannot be sustained. 6. It is urged by assessee's learned counsel that order to charge or not to charge interest under section 217 was not for Commissioner to decide and it was for ITO to deal with it after considering section as well as rule 40 of Income-tax Rules, 1962 which gives ITO discretion to waive or to reduce interest. It is, therefore, submitted that order of Commissioner should be cancelled. 7. learned departmental representative supported order of Commissioner. 8. We have heard both sides at length and we have perused orders of authorities below for our consideration. We have taken not of decisions cited by Commissioner in impugned order. Similar situation has arisen in different High Courts in which it has been noted that order could be said to be erroneous where either it did not decide point or record finding or issue which should have been done or decided wrongly. In case of Addl. CIT v. Krishna Narayan Naik [1984] 150 ITR 513 (Bom.) it was held that ITO was bound to charge interest under section 139(8) of Act. He had, however, power to waive or reduce it. Since his order was silent on point action under section 263 by Commissioner was justified. similar is view of Hon'ble Madhya Pradesh High Court in case of Addl. CIT v. Indian Pharmaceuticals [1980] 123 ITR 874. We may also refer other decisions as decided by different High Courts, namely, City Palayacot Co.'s case (supra), Vishnu Kumar Soni v. CIT [1985] 155 ITR 34 (MP) and Cochin-Malabar Estates Ltd.'s case (supra). 9. In case of Singho Mica Mining Co. Ltd. (supra) Hon'ble Calcutta High Court held that order of ITO failing to charge interest and no reason was mentioned for which it would not be possible to infer that ITO has considered matter at all or exercised his discretion. Action under section 263 was upheld. In case of Premchand Sitanath Roy (supra), Calcutta High Court has sustained order under section 263 as ITO did not charge interest under section 139 on facts of case. 10. Thus, after hearing both sides and after considering orders of authorities below and keeping in view ratio of different decisions noted above, we are of opinion that Commissioner has validly initiated proceedings under section 263 in present case. This aspect of his order is sustained. But there is some force in respect of submissions made on behalf of assessee that Commissioner cannot cancel assessment under section 143(3) with direction to ITO to pass fresh assessment order. We are of opinion that this part of order of Commissioner cannot be sustained as subject matter which was found to be erroneous was not assessment order as such as discussed earlier. In circumstances, we would modify direction of Commissioner on point that ITO should examine facts of case and apply his mind regarding charging of interest under section 217 and after giving assessee opportunity of being heard. assessment order as whole is not set aside. Subject to above modification order of Commissioner is sustained. 11. In result, appeal of assessee is partly allowed. *** KANORIA OVERSEAS LTD. v. INCOME TAX OFFICER