Calcutta High Court
Commissioner Of Income-Tax vs Shivaoni And Co. on 3 March, 1989
Equivalent citations: [1990]184ITR573(CAL)
Author: Suhas Chandra Sen
Bench: Suhas Chandra Sen
JUDGMENT Suhas Chandra Sen, J.
1. The Tribunal has referred the following question of law under Section 256(1) of the Income-tax Act, 1961 ("the Act"), to this court :
"Whether, on the facts and in the circumstances of the case and on a correct interpretation of Section 246 of the Income-tax Act, 1961, the Tribunal was right in holding that an appeal would lie before the Appellate Assistant Commissioner against the levy of interest under Section 139 of the said Act ?"
2. The reference relates to the assessment years 1965-66 and 1966-67.
3. The dispute was whether levy of interest was appealable. The Appellate Assistant Commissioner declined to entertain the contention of the assessee on the ground that no appeal lay against the levy was not appealable (sic.). When the matter came up before the Tribunal, the Tribunal held that the dispute as to levy of interest could be raised along with other points in appeal before the Appellate Assistant Commissioner. The Tribunal, therefore, held that the Appellate Assistant Commissioner was not justified in refusing to deal with the assessee's contentions on merits. The order of the Appellate Assistant Commissioner was set aside and restored to his file by the Tribunal for fresh decision on this point.
4. The question of applicability on the point of levy of interest has now been gone into and decided finally by the Supreme Court in the case of Central Provinces Manganese Ore Co, Ltd. v. CIT [1986] 160 ITR 961 in which the Supreme Court had observed that interest was levied under Section 139(8) or Section 215 of the Act and the levy of interest was a part of the-process of assessment. Although Section 143 and Section 144 did not specifically provide for the levy of interest and the levy of interest was attributable to Section 139(8) or Section 215, it was nevertheless a part of the process of assessing the tax liability of the assessee. In this case, the levy of interest was a part of the process of assessment and it was open to the assessee to dispute the levy of interest in appeal, provided he limited himself to the ground that he was not liable to the levy at all.
5. Therefore, the answer to the question as framed is that the appeal will lie against levy of interest but the assessee will have to confine himself to the ground that he was not liable to the levy at all.
6. There will be no order as to costs.
Bhagabati Prasad Banerjee, J.
7. I agree.