TMI Blog1993 (12) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellate Tribunal was right in law in deleting interest charged under section 215 of the Income-tax Act, 1961, ignoring the fact that charging of interest is compensatory in nature and not a penal one ?" The Tribunal, vide its order dated September 9, 1992 (annexure P-2), declined to refer the aforesaid question to this court for adjudication, as no referable question of law arises in the facts of the case. The facts leading to the question aforesaid are brief. The assessee, Messrs. Gurkartar Steels (P.) Ltd. was supposed to pay advance income-tax. While framing the assessment, the Income-tax Officer, vide order dated January 14, 1987 (annexure P-3), held that advance income-tax was not paid and hence the assessee was liable to pay inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting the assessee to charge of interest inasmuch as the assessee in ground No. 3 has specifically mentioned that,' ...... has wrongly charged interest under section 215.' In view of the facts stated in the order of the learned first appellate authority as also the contentions raised before us, we direct that no interest would be charged from the assessee under section 215." The question for consideration at this stage is as to whether the assessee was disputing his liability for charging of interest or he was claiming waiver or reduction in the amount of interest. As would appear from the order of the Tribunal referred to above, the assessee was denying his liability from the very beginning in the assessment proceedings. He went up to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 139 or section 215, it is nevertheless a part of the process of assessing the tax liability of the assessee. Where the Income-tax Officer considers that there is a case for levying interest under sub-section (8) of section 139 or under section 215, what he does in practice is to make an order levying such interest after completing the assessment of the assessee's total income and the tax payable by him." It was further observed as under (at page 966): "Now, the question is whether orders levying interest under sub-section (8) of section 139 and under section 215 are appealable under section 246 of the Income-tax Act. Clause (c) of section 246 provides an appeal against an order where the assessee denies his liability to be assessed un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the return was not belated or that the penal provision was not attracted at all to his case. In such a case also, he denies his liability to be assessed to interest. " Learned counsel for the petitioner-Department has tried to argue while making reference to the orders passed by the Income-tax Officer and the Commissioner of Income-tax that assessment of interest has been framed separately under section 215 of the Act and the question of waiver or reduction could not be taken up in appeal filed against the original assessment framed on the return. This contention cannot be accepted in view of the legal position already explained above in the case of Central Provinces Manganese Ore Co. Ltd. [1986] 160 ITR 961 (SC). When assessment on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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