Rectification orders enhancing computed interest are appealable where the dispute concerns recalculation, not original leviability.

An order that only rectifies the computation of interest already levied is treated as a rectification order under section 154 of the Income-tax Act and is appealable. The dispute was not about whether interest under section 139(8) could be levied, but about the enhancement of the quantified interest after the original assessment. Applying substance over form, the Calcutta HC held that a rectification enhancing the amount payable falls within section 154 and therefore gives rise to an appeal. The question was answered in the negative, in favour of the assessee.

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Issues: Whether an appeal lies against an order under section 154 of the Income-tax Act, 1961, enhancing the interest levied under section 139 of that Act.

Analysis: The interest had already been levied in the original assessment, but the Income-tax Officer later found that it had been incorrectly calculated and rectified the assessment by enhancing the amount payable. The dispute, therefore, related not to the leviability of interest under section 139(8), but to rectification of the quantum of interest under section 154. A rectification order under section 154 is appealable, and the matter had to be judged by its substance rather than its form.

Conclusion: An appeal does lie against rectification under section 154 enhancing the interest levied under section 139, and the question is answered in the negative, in favour of the assessee.

Ratio Decidendi: Where an order merely rectifies the computation of interest already levied, the order is one under section 154 and is appealable, even if the underlying subject relates to interest under section 139.

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