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Section 217 of the Income-tax Act, 1961 - Advance tax - Interest payable by assesses - Whether where assessee had preferred an appeal against assessment order, assessee could also agitate question of levy of interest under section 217 - Held, yes Section 139(8) of the Income-tax Act, 1961 - Return of income - Interest for late filing of - Whether where assessee had preferred an appeal against assessment order, assessee could also agitate question of levy of interest under section 139(8) - Held, yes FACTS The assessee-firm was assessed and interest was charged by the ITO under section 139 for late filing of return and under section 217 for late payment of advance tax. The assessee went in appeal against the assessment order and also against interest charged. The AAC entertained the appeal regarding charging of interest under sections 139 and 217 also. On appeal by the revenue before the Tribunal, it was contended that the appeal regarding levy of interest under sections 139 and 217 was not maintainable, which was upheld by the Tribunal on the ground that the appeal against levy of interest did not lie before the AAC. On reference: HELD In the case of CIT v . Associated Stone Industries (Kotah) Ltd. [1981]130 ITR 868 (Raj.), it was observed that if the assessee denied his liability to be assessed in respect of advance tax and thereby denied altogether his liability to pay tax, then in an appeal filed against the assessment order, the assessee could also challenge the imposition of penal interest. In the instant case, as the assessee had preferred the appeal against the assessment order, the assessee could legitimately agitate the question of levying of interest under sections 139 and 217. So, the Tribunal was not right in holding that the AAC acted beyond his jurisdiction in entertaining the assessee's appeal. CASE REVIEW CIT v. Associated Stone Industries (Kotah) Ltd. [1981] 130 ITR 868 (Raj.) and CIT v. Devichand Panmal [1986] 160 ITR 545 (Raj.) followed and relied upon. CASES REFERRED TO CIT v. Associated Stone Industries (Kotah) Ltd. [1981] 130 ITR 868 (Raj.) and CIT v. Devichand Panmal [D.B. IT Reference No. 16 of 1979, dated 25-7-1985]. R. Balia for the…

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