Appeal deemed maintainable under specific sections despite initial refusal of interest

The Court determined that the appeal was not maintainable under section 246(1)(c) against the refusal to grant interest under sections 214 and 244(1A). However, the appeal was deemed maintainable under section 246(1)(f) as the Assessing Officer's order was considered a rectification order enhancing the assessment. The Court held that the appeal was competent under section 246(1)(f) due to the failure to grant interest while implementing the appellate order. The reference was disposed of without any order as to costs.

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Issues:
Whether appeal under section 246(1)(c) was maintainable against refusal to grant interest under section 214 and section 244(1A)Rs. If not, whether appeal was maintainable under section 246(1)(f)Rs.

Analysis:
The judgment of the High Court concerned an appeal by an assessee under section 256(1) of the Income-tax Act, 1961, for the assessment year 1985-86. The primary issue was whether the appeal against the refusal to grant interest under sections 214 and 244(1A) was maintainable under section 246(1)(c) or section 246(1)(f).

Arguments:
The assessee contended that the appeal was maintainable under section 246(1)(c) based on a previous judgment and alternatively under section 246(1)(f) as the Assessing Officer's order was a rectification order. The Department argued that since the only ground of appeal was non-granting of interest, the appeal was not maintainable.

Findings:
The Court emphasized that there is no inherent right of appeal and it must be specifically conferred by the statute. It was noted that the Department did not deny the liability to pay interest to the assessee, and the Assessing Officer had not refused the claim for interest under sections 214 and 244(1A). The Court distinguished various judgments cited by the assessee where the Department had explicitly denied interest payment. The Court held that the appeal under section 246(1)(c) was not maintainable in this case.

However, the Court found merit in the argument that the appeal was maintainable under section 246(1)(f) as it concerned an order under section 154 or section 155 having the effect of enhancing the assessment or reducing a refund. Citing a relevant case, the Court concluded that the appeal was competent under section 246(1)(f) as the Assessing Officer had failed to grant interest under sections 214 and 244(1A) while giving effect to the appellate order.

Conclusion:
The Court held that although the appeal was not maintainable under section 246(1)(c), it was maintainable under section 246(1)(f) based on the judgment of a previous case. The reference was disposed of with no order as to costs.

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