Regular assessment for interest purposes means the first assessment order, so reassessment cannot widen section 215 liability.

For sections 214 and 215 of the Income-tax Act, 1961, "regular assessment" means the first assessment order made under section 143 or section 144. A reassessment under section 147, or a consequential order giving effect to appellate proceedings, does not take on the character of a regular assessment for charging interest. On that construction, interest under section 215(3) could not be levied on income enhanced in reassessment where no such interest had been charged in the original assessment.

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Issues: Whether interest under section 215(3) of the Income-tax Act, 1961 could be levied on income enhanced in reassessment under section 147 of the Income-tax Act, 1961, when no such interest had been levied in the original assessment.

Analysis: The expression "regular assessment" in sections 214 and 215 of the Income-tax Act, 1961 was treated as bearing the same meaning. The governing principle was that "regular assessment" means the first order of assessment passed under section 143 or section 144, and a consequential order giving effect to higher appellate or reassessment proceedings does not acquire the character of a regular assessment. On that construction, reassessment under section 147 does not expand the scope of interest liability under section 215(3) beyond what is permissible with reference to the original regular assessment.

Conclusion: Interest under section 215(3) could not be levied on the reassessment. The question was answered in the affirmative, in favour of the assessee and against the Revenue.

Ratio Decidendi: For the purpose of sections 214 and 215 of the Income-tax Act, 1961, "regular assessment" means the first assessment order under section 143 or section 144, and a reassessment or consequential order under section 147 cannot be treated as a regular assessment for charging interest.

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