Competence of appeal against interest levy depends on a pleaded denial of tax liability; new jurisdictional objections cannot be raised later.

An appeal against levy of interest under section 139(1) was not competent where the memorandum only disputed the interest and did not assert denial of liability to be assessed under the Income-tax Act. Section 246(c) was therefore not attracted on the facts stated in the appeal, and a new jurisdictional objection to levy of interest under section 139(1) read with section 139(8) could not be raised for the first time without the necessary factual foundation. The reference was answered against the assessee.

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Issues: Whether an appeal to the Appellate Assistant Commissioner was competent against levy of interest under section 139(1) of the Income-tax Act, 1961.

Analysis: The appeal memo merely challenged the levy of interest under section 139(1) and did not state that the assessee denied liability to be assessed under the Act. The appellate provision in section 246(c) was therefore not attracted on the facts stated in the appeal. A challenge based for the first time on want of jurisdiction to levy interest under section 139(1) read with section 139(8) could not be entertained at that stage, since the factual foundation for treating the case as one of denial of liability to be assessed was absent.

Conclusion: The appeal before the Appellate Assistant Commissioner was not competent on the facts of the case and the reference was answered against the assessee.

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