Appeal against interest levy under the Income-tax Act was held incompetent because section 246 did not cover such orders.

An appeal directed only against the levy of interest for delay in filing a return was held incompetent under the Income-tax Act, 1961. The earlier Full Bench view controlled the issue: section 246 did not confer a right of appeal against an order imposing interest under section 139(8). The assessee's reliance on delay as sufficient cause for waiver under rule 117A(v) did not change the character of the order, which remained an interest levy and not an appealable assessment determination. The appellate remedy was therefore unavailable.

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Issues: Whether an appeal to the Appellate Assistant Commissioner against the levy of interest under section 139 of the Income-tax Act, 1961, was competent.

Analysis: The question was governed by the earlier Full Bench decision holding that an appeal directed only against the levy of interest did not lie. The assessee's plea that the delay in filing returns furnished sufficient cause for waiver under rule 117A(v) of the Income-tax Rules, 1962, did not alter the character of the order as one imposing interest under section 139(8) of the Income-tax Act, 1961. The appellate provisions in section 246 of the Income-tax Act, 1961, did not make such an appeal competent.

Conclusion: The appeal against the levy of interest was not competent.

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