An assessment under Section 147 of the Income-tax Act, 1961 is not a regular assessment and, therefore, interest is not leviable under Section 139(8) and Section 217 of the Act.

S.B.Sinha, J.

1. In this writ application, the petitioner has prayed for issuance of a writ of certiorari for quashing a part of the demand notices as contained in annexures 2, 2/A and 2/B of the writ application whereby and whereunder interest has been charged on the petitioner under Sec.139(8) as well as under Sec.217 of the Income-tax Act, 1961 (hereinafter to be referred to as "the Act").

2. The facts of the case lie in a very narrow compass.

3. For the assessment years 1980-81, 1981-82 and 1982-83, the petitioner was allegedly assessed in terms of Sec.147 of the said Act.

4. According to the petitioner, notices under Sec.148 of the Act were issued on April 16, 1983, which were served on the petitioner on May 17, 1983, and in compliance thereof, the petitioner submitted his returns in respect of the aforementioned assessment years on March 6, 1984.

5. By order dated November 19, 1984, the Income-tax Officer, Ward-A, Income-tax Circle-I, Dhanbad (respondent No. 1), completed the assessment proceedings and passed assessment orders for the aforementioned assessment years which are contained in annexures 1 and 1/B in respect of the assessment years 1980-81 and 1982-83 and it has been mentioned therein as follows :

"Proceeding under sections 271(1)(a), 271(1)(b) and 271(1)(c) initiated. Charge interest under sections 139(8) and 217."

6. However, in respect of the assessment year 1981-82, in the assessment order, the words "Charge interest under Sec.139(8) and Sec.271" do not appear.

7. According to the petitioner, no interest was leviable under the aforementioned provisions as the petitioner was assessed under Sec.147 of the said Act an assessment whereunder is not a regular assessment. It is further submitted that in any event, as respondent No. 1 did not pass any order with regard to the levy of interest for the assessment years as contained in annexure 1 series, the purported levy of interest in the demand notices under Section 139(8) and under Sec.217 of the said Act, is illegal.

8. The petitioner has further submitted that as there was no provision for appeal against the said demand notices charging interest, he filed an application before respondent No. 1 purported to be under Sec.154 of the said Act and respondent No. 1, by an order dated March 18, 1985, as contained in annexure 4 series to the writ application, dismissed the said applications filed by the petitioner and confirmed his earlier orders imposing interest in respect of the three assessment years.

9. Mr. S. B. Gododia, learned counsel appearing on behalf of the petitioner, raised two-fold contentions.

10. Firstly, learned counsel submitted that interest is chargeable under Section 139(8) and Sec.271 of the Income-tax Act only in the event an assessee is subjected to a regular assessment and not to an assessment under Sec.147 thereof. According to learned counsel, this would be clear from a subsequent amendment brought in the Act with effect from April 1, 1986, as a result whereof the assessment made under Sec.147 of the said Act has also been brought within the mischief of the aforementioned provision.

11. Learned counsel, in this connection, has placed strong reliance upon a a judgment of the Karnataka High Court in Charles D Souza V/s. CIT [1984] 147 ITR 694 (Kar). Reliance has also been placed upon a Division Bench decision of this court in CIT V/s. Ram Chandra Singh [1976] 104 ITR 77.

12. Learned counsel next submitted that, in any event, as the matter relating to levy of interest under Sec.139(8) and Sec.217 of the said Act was not mentioned in the orders of assessments, no interest could be levied by way of demand notice. For this proposition, learned counsel has relied upon a decision in Monohar Gidwany V/s. CIT [1983] 139 ITR 498 (Cal).

13. Mr. K. K. Jhunjhunwala, learned counsel appearing on behalf of the respondents, on the other hand, submitted that from a perusal of the orders of assessment as contained in annexure 1 series to the writ appl