Interest not payable under IT Act upon reassessment; original assessment effacement. Upheld single judge's order.

The court held that interest under sections 139(8) and 215 of the Income-tax Act, 1961 is not payable in reassessment cases due to the effacement of the original assessment upon reopening. The appellants' contention that interest should be paid based on the original assessment was deemed untenable. The court affirmed the single judge's order, dismissing the appeals and clarifying the liability of interest in reassessment cases.

---

---

Issues involved: Assessment of interest under sections 139(8) and 215 of the Income-tax Act, 1961 in reassessment cases.

Judgment Summary:

Issue 1: Interest under sections 139(8) and 215 in reassessment cases
The respondent, a Hindu undivided family, was assessed to tax including interest under sections 139(8) and 215 of the Income-tax Act, 1961. Appeals were filed against the assessments, but reassessments were initiated under section 148. The Income-tax Officer levied interest under sections 139(8) and 215 in the reassessments. Appeals were made against the interest levied, but the second appellant refused to interfere. A writ petition was filed, which was allowed by the learned single judge based on precedent. The appellants contended that interest under sections 139(8) and 215, though not leviable in reassessments, should still be paid based on the original assessment. However, the court held that the original assessment gets effaced upon reopening, making the contention untenable. Citing precedent, the court affirmed the single judge's order and dismissed the appeals.

This judgment clarifies the liability of interest under sections 139(8) and 215 in reassessment cases, emphasizing the effacement of the original assessment upon reopening and the consequent inapplicability of interest levied under the original assessment in such scenarios.

---