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[2008] 300 ITR 216 [2008] 166 TAXMAN 439 (BOM.) HIGH COURT OF BOMBAY Sk. Muneer Sk. Mannu Choudhary v. Deputy Commissioner of Income-tax, Aurangabad N.V. DABHOLKAR AND M.G. GAIKWAD, JJ. TAX APPEAL NOS. 37 TO 41 AND 43 TO 50 OF 2005 MARCH 15, 2007 Section 246A of the Income-tax Act, 1961 - Commissioner (Appeals) - Appealable orders - Whether levy of interest under section 158BFA(1) is not appealable under section 246A - Held, yes - Whether, however, levy of interest can be appealed against with full force and all possible contentions, provided such a challenge is together with challenge to assessment under section 158BC - Held, yes FACTS During search conducted at the premises of the assessee, certain assets, cash, documents and books of account were seized. On 28-2-1999, the Assessing Officer issued a notice under section 158BC(a) asking the assessee to file the return within 16 days from the date of notice. The assessee prayed for extension of time for filing of return but the Assessing Officer refused to extend the same and passed an order under section 158BC(c) determining undisclosed income of the assessee. The interest under section 158BFA was also levied for late filing of return. On appeal, the Commissioner (Appeals) upheld the order of the Assessing Officer holding that remedy of appeal was not available to the assessee. On further appeal, the Tribunal confirmed the order of the Commissioner (Appeals) holding that under section 246A, appeal is not provided against levy of interest under section 158BFA. On appeal : HELD In section 158BFA(1) there is no provision empowering the Assessing Officer either to reduce the interest or to waive it or to come to a conclusion that it need not be levied. The provision is couched in the words. 'The assessee shall be liable to pay simple interest'. Thus, there is no option or escape from interest leviable under section 158BFA(1) to an assessee, who is being assessed only after raid and search under section 132.[Para 7] It was not the case of assessee that it had no undisclosed income. It had come with a case that interest levied by the Assessing Officer was just mechanical. It had not come with a case that it was not…

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