- (1.) FOR the assessment year 1966-67 the ITO, Jullundur, assessed the company to a total income of Rs. 1,87,298, Since the ITO was of the view that the advance tax paid by the assessee fell short by more than 25 per cent. of the tax found to have been payable by it, he ordered penal interest to be charged on the outstanding amount of tax.
(2.) THE assessee went up in appeal. The AAC gave it relief of Rs. 37,278 about the quantum of its total income, but declined to grant any relief regarding payment of penal interest on the following ground: "in the last ground, charge of interest Under Section 215 is challenged. This ground is incompetent as there is no provision for appeal Under Section 246 against the charge of interest. The same is, accordingly, dismissed. "
(3.) THE assessee went in appeal before the Income-tax Appellate Tribunal, Amritsar Bench (hereinafter referred to as "the Tribunal"), which allowed the same and, qua the relief of interest, observed as under: "the last ground by the assessee in this appeal is that the Appellate Assistant Commissioner was not justified in holding that the charge of interest under Section 215 of the Income-tax Act, 1961, is not appealable under Section 246 of the Income-tax Act. It was submitted that the whole assessment order was the subject-matter of appeal before the Appellate Assistant Commissioner and in view of the provisions of Section 246 (c) the interest Under Section 215 imposed by the Income-tax Officer was a part of the assessment order and hence an appeal lies to the Appellate Assistant Commissioner. We agree with the contention of the learned counsel. Since the Appellate Assistant Commissioner has not given his finding about the charge of penal interest we set aside his order on this point and direct him to entertain this ground of appeal and decide the point on merits after allowing opportunity of being heard to both the parties. ";