Appellate scope over assessment orders includes levy of interest as an integral part of the assessment.

Where a valid appeal lies against an assessment order, the appellate authority may examine all matters forming part of that order and is not confined by any artificial restriction on its power. Levy of interest under section 217 was treated as an integral component of the assessment, so a ground challenging that levy could be considered together with the other grounds arising from the assessment order. The question was answered in the negative, and the Tribunal was held wrong in refusing to go into the interest issue along with the appeal against the assessment.

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Issues: Whether levy of interest under section 217 of the Income-tax Act could be examined in appeal along with the other grounds arising out of the assessment order.

Analysis: The reference was decided by following the principle that where a valid appeal lies against the assessment order, the appellate authority is not confined by any artificial restriction on its power to deal with matters forming part of that order. Liability to pay interest under section 217 was treated as an integral part of the assessment order, and therefore a ground relating to such levy was capable of being considered in the appeal against the assessment.

Conclusion: The question was answered in the negative and in favour of the assessee. The Tribunal was not right in holding that levy of interest under section 217 could not be gone into along with the other grounds of appeal arising from the assessment order.

Ratio Decidendi: Where an assessment order is validly under appeal, the appellate authority may examine all matters forming part of that order, including levy of interest that is an integral component of the assessment.

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