Sankar Prasad Mitra, C.J. - (1.) This is a reference under Section 256(1) of the Income-tax Act, 1961. For the assessment year 1963-64, the assessee filed a return on 15th December, 1964, showing the total income of Rs. 29,937. The return was due under Section 139 on 24th October, 1963.
(2.) On September 25, 1967, the Income-tax Officer made the assessment and computed the total income at Rs. 2,60,720. On the 19th September, 1969, the Commissioner of Income-tax passed an order under Section 263 of the Act of 1961 and directed the Income-tax Officer to levy interest under the proviso to Section 139(1) which he had omitted to do at the time of making the assessment. The Income-tax Officer in accordance with the Commissioner's direction levied the interest of Rs. 6,046.
(3.) An appeal was preferred on the 15th December, 1969, to the Appellate Assistant Commissioner. On behalf of the assessee it was "urged before the Appellate Assistant Commissioner that interest under Section 139(1) was not levied at the time of the original assessment by the Income-tax Officer, The levy of interest under Section 139(1) was a part and parcel of the regular assessment proceedings. It should normally be done before the time limit for completing the assessment was over. In this case, the Commissioner of Income-tax passed the order under Section 263 on a date which, fell beyond the time limit prescribed for completing the assessment. The ultimate levy of interest, therefore, was barred by limitation. The Appellate Assistant Commissioner did not accept this contention. The Tribunal also in the appeal against the Appellate Assistant Commissioner's order agreed with his conclusions.;