Law:

Section:

Section 147 read with sections 139(8) and 217 of the Income-tax Act, 1961 - Income escaping assessment - General - Assessment year 1967-68 - Whether interest under sections 139(8) and section 217 cannot be levied in case of an assessment or reassessment made under section 147 - Held, yes FACTS The assessment of the assessee was completed under section 143(3). In the course of the assessment, it was found that apart from interest income, there was an increase in the net wealth during the relevant year represented by credits in bank accounts. After enquiry, the ITO came to the conclusion that the assessee was able to explain the source of only a part of the said deposit. Accordingly, the ITO taxed the unexplained deposit as income from undisclosed sources. The assessment was completed under section 143(3) read with section 147(1). The ITO also levied interest under section 139(8) and section 217. On appeal, the assessee contended, inter alia, that the levy of interest under section 13(8) and section 217 was not sustainable, since the assessment had been done under section 147 and not under section 143 or section 144. The AAC dismissed the assessee's appeal and held that the assessment reopened under section 147, appeal and held that the assessment reopened under section 147 was done under section 143(3) read with section 147 and rejected the contention of the assessee that no interest was leviable in the case of an assessment done under section 147. The Tribunal, on further appeal, reversed the AAC's order and held that levy of interest was permissible in reassessment proceedings, but cancelled the levy with liberty to the Assessing Officer to levy interest after hearing the assessee. On reference : HELD All assessments which are done under Chapter XIV of the Act starting from section 139 to section 148, are assessments made under section 143 or 144 and include reassessments done under section 147 read with section 143 or section 144, as the case may be. All assessments under the Act are done by recourse to procedure prescribed for assessments under the Act, viz., sections 139 to 143. The procedure or machinery for assessment is common, whether the proceedings…

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