Law:

Section:

Section 264, read with section 215 of the Income-tax Act, 1961 [Corresponding to section 33A(2), read with section 18A(6) of Indian Income-tax Act, 1922] - Revision of other orders - Assessment year 1959-60 - Penal interest was imposed on assessee for under assessment of estimating income for payment of advance tax - Whether merely because tax and penal interest were added together and collected in same manner, imposition of penal interest would not be a part of process of assessment of income under section 23 of 1922 Act and, hence, no appeal would lie against imposition of such penal interest under section 30 of 1922 Act - Held, yes - Whether, in such cases, revision position would be validly maintainable before Commissioner under section 33A(2) of 1922 Act - Held, yes FACTS For the assessment year 1959-60, the petitioner-company was charged to a penal interest under sections 18A(6) and (7) of 1922 Act. His revision petition against the said levy of penal interest was dismissed by the Commissioner on a technical ground that a revision under proviso (c) to section 33A(2) of 1922 Act would not lie to him. On writ : HELD Boddu Seetharamaswamy v. Commissioner of Income-tax it was, held that section 30 of 1922 Act which regulated the rights of appeal did not provide for an appeal to the Commissioner against an order imposing penal interest under section 18A(6). Such imposition of penal interest was not a part of the process of assessment of the income under section 23 so as to make the order appealable under section 30 for the reason that the tax and the penal interest were added together and collected in the same manner. Penal interest could in no sense be regarded as a part of the total income of the assessee who was assessed under section 23. The fact that the penal interest was added to the tax, since it found a place in the order of assessment, could make no difference to the true character of penal interest. As the expression itself indicated it was a penalty levied on account of under-assessment of the estimated income for purposes of payment of advance tax. Section 30 which provides for appeals against specific orders made no mention of section 18A(6).…

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