Law:

Section:

Income-tax--- ----Interest---Delay in filing return---Deficiency in paying advance tax--­Assessment order---Direction for charging interest for delay and deficiency---Reassessment---Assessment reopened only for adding income from interest---Interest for delay and deficiency under direction in original assessment order also added---Appellate Tribunal holding that interest for delay and deficiency could not be charged in reassessment--­High Court---Reference of question whether direction for charging interest in original assessment does not survive---Decision of High Court---Savouring of appellate jurisdiction--- Decision set aside---Case remanded for rehearing reference---Indian Income Tax Act, 1961, Ss.139(8), 147, 215 & 256. In the assessment order the Income-tax Officer had given directions for charging interest under section 139(8) (delay in filing the return) and section 215 (deficiency in advance tax) of the Income Tax Act, 1961. In reassessment proceedings only income of the assessee from interest was added; and, in view of the direction in the original assessment, interest was charged under sections 139(8) and 215 in the reassessment order. The assessee claimed that no such interest could be levied in the reassessment proceedings and the Appellate Tribunal accepted the claim The question whether the Tribunal was right in law in holding that inest under sections 139(8)/215 levied in the original assessment did not survive when a reassessment was done under section 148 was referred to the High Court. the High Court disposed of the reference holding that the Income-tax Officer should have passed separate orders for charging interest for delay and deficiency instead of incorporating the direction in the assessment order; that, since the original assessment had not been affected at all and only interest income was added in the reassessment proceedings, finality had been given to the assessment and the liability of the assessee for interest under sections 139(8) and 215 did not cease to exist, but that liability was restricted up to the date of…

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