2006 (7) TMI 97

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.... not touching the aspect of interest under sections 214 and 244(1A) ?" 3 Mr. Naik, learned counsel for the Revenue submitted that if any order in relation to interest is not made in favour of the assessee while refunding the tax extra paid, then, against the order passed by the Assessing Officer, an appeal shall not lie to the appellate authority. He submits that as the provisions contained in section 214 are not subjected to appeal, any order passed by the Assessing Officer, even while he is giving effect to the order passed by the appellate court, cannot be subjected to an appeal. 4 On the other hand, Shri Soparkar, learned counsel for the assessee, submitted that in the matter of Empire Industries Ltd. v. CIT [1992] 193 ITR 295, a ....

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....(c) of section 246 is in two parts. The first part deals with an order against an assessee where the assessee denies his liability to be assessed under the Act. The second part deals with any order of assessment under sub-section (3) of section 143 or section 144. In the second case, however, there is a further restriction that an appeal against such order lies only where the assessee objects (i) to the amount of income assessed, or (ii) to the amount of tax determined, or (iii) to the amount of loss computed, or (iv) to the status under which he is assessed. The first part of this clause deals with denial of liability. Interest under section 214 does not fall under the heading 'Liability' of the assessee. It is in effect the liability of t....

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....legal fiction, therefore, has to be carried to its logical conclusion. In construing the scope of a legal fiction it would be proper and even necessary to assume all those facts on which alone the fiction can operate. Hence interest under section 214 is a part of the assessment and is deemed to be tax for the purposes of this Act including clause (c) of section 246. The appeal by an assessee aggrieved by an order of assessment made under section 143(3) or section 144, either originally or in consequence of an appellate order with a view to giving effect to the directions contained therein, objecting to the amount of interest payable by the Government under section 214 to the assessee as determined by the Income-tax Officer is, therefore,....