There is no provision for appeal against an order passed under Section 215(1) of the Income-tax Act, 1961, under Section 246 of the Act.

B.S.Dhillon, J.

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."

4. The revenue felt aggrieved against the order of remand and succeeded in getting the following question of law referred to us for our opinion:

"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that an appeal lies to the Appellate Assistant Commissioner against the order of the Income-tax Officer charging interest Under Section 215 of the Income-tax Act, 1961 ?"

5. With a view to decide the question of law referred to us, the relevant provisions of Section 215 of the Act may usefully be reproduced, which are as follows:

"215. (1) Where, in any financial year, an assessee has paid advance tax under Section 209A or Section 212 on the basis of his own estimate (including revised estimate), and the advance tax so paid is less than seventy-five per cent. of the assessed tax, simple interest, at the rate of twelve per cent, per annum from the 1st day of April next following the said financial year up to the date of the regular assessment shall be payable by the assessee upon the amount by which the advance tax so paid falls short of the assessed tax.

(2) Where before the date of completion of a regular assessment, tax is paid by the assessee under Section 140A or otherwise :-

- (i) interest shall be calculated in accordance with the foregoing provision up to the date on which the tax is so paid; and

(ii) thereafter, interest shall be calculated at the rate aforesaid on the amount by which the tax as so paid (in so far as it relates to income subject to advance tax) falls short of the assessed tax.

(3) Whereas a result of an order under Section 154 or Section 155 or Section 250 or Section 254 or Section 260 or Section 262 or Section 264, the amount on which interest was payable under this section has been reduced, the interest shall be reduced accordingly and the excess interest paid, if any, shall be refunded...."

6. Section 246 of the Act makes provision as regards appeals to the AAC. The orders passed under various sections mentioned therein have been held to be appealable, bu