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Issues Involved:
1. Levy of interest u/s 139(8) and u/s 215 of the Income-tax Act, 1961. 2. Appealability of orders levying interest under s. 139(8) and s. 215. 3. Jurisdiction of the Commissioner of Income-tax to revise orders under s. 264. Summary: 1. Levy of Interest u/s 139(8) and u/s 215: The appellant, a sterling company exporting manganese, was assessed to income-tax for the assessment year 1967-68. Interest amounting to Rs. 56,391 u/s 139(8) and Rs. 9,42,336 (later reduced to Rs. 5,07,880) u/s 215 was levied against the appellant. The appellant contended that there was ample justification for the delay in furnishing the return and for the payment of advance tax at a figure less than 75% of the assessed tax. The relevant provisions and rules, including Rule 117A and Rule 40, were discussed, which allow for the reduction or waiver of interest under specified circumstances. 2. Appealability of Orders Levied under s. 139(8) and s. 215: The court examined whether orders levying interest under s. 139(8) and s. 215 are appealable under s. 246 of the Income-tax Act. It was held that the levy of interest is part of the process of assessment and not a penalty. The court referred to the Karnataka High Court's decision in National Products v. Commissioner of Income-tax, Mysore, which clarified that while the levy of interest is not appealable, it is open to the assessee to dispute the levy in an appeal against the regular assessment order if he denies his liability to pay such interest. 3. Jurisdiction of the Commissioner of Income-tax to Revise Orders under s. 264: The appellant filed revision petitions before the Commissioner of Income-tax under s. 264, objecting to the levy of interest. The Commissioner dismissed the petitions, stating that he could not revise any order pending on an appeal before the Appellate Assistant Commissioner unless the entire appeal was withdrawn. The court held that the question of waiver or reduction of interest cannot be the subject of an appeal under clause (c) of s. 246 and should be dealt with by the Commissioner in his revisional jurisdiction. However, the assessee must first demonstrate before the Income-tax Officer that there is a case for waiving or reducing the levy of interest. Conclusion: The Supreme Court affirmed the orders of the Commissioner of Income-tax rejecting the revision petitions but allowed the appellant to apply to the Income-tax Officer for waiver or reduction of interest within six weeks. The appeals were dismissed with no order as to costs.
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