Penal interest for shortfall in advance tax cannot be appealed to the Appellate Assistant Commissioner.

The article clarifies that an appeal to the Appellate Assistant Commissioner is not competent against levy of penal interest imposed under the special provision for shortfall in advance tax; statutory appeal listings exclude such orders and the penal interest is a distinct compliance mechanism added to tax solely for collection rather than forming part of assessment. Equitable arguments cannot supply an omitted statutory appeal right. The statutory scheme nonetheless allows reduction of interest and proportionate refund where tax is reduced on appeal or revision, reducing prejudice to the assessee.

---

---

Issues: Whether an appeal to the Appellate Assistant Commissioner against the levy of penal interest under section 18A(6) of the Income-tax Act is competent.

Analysis: Section 30 enumerates the orders against which an appeal to the Appellate Assistant Commissioner lies and does not expressly include an order imposing penal interest under section 18A(6). Section 18A(6) prescribes a distinct statutory mechanism for imposing penal interest where advance payments fall short of eighty per cent of the tax ultimately determined; section 18A(8) provides for adding such interest to the tax for collection. The statutory scheme shows penal interest is imposed by a special provision to ensure compliance with advance payment obligations and is added to the tax only to facilitate collection; it is not part of the process of assessing total income under section 23. Where the statute clearly omits an appeal right, equitable considerations cannot supply one. The statutory scheme also provides for reduction of interest and refund proportionate to any reduction of tax on appeal or revision, mitigating prejudice to the assessee.

Conclusion: An appeal to the Appellate Assistant Commissioner against the levy of penal interest under section 18A(6) of the Income-tax Act is not competent; answer in the negative.

---