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Issues Involved:
1. Competence of the Income-tax Officer to pass a separate order levying interest u/s 215. 2. Validity of the order levying interest u/s 215 beyond the period prescribed u/s 153. Summary: Issue 1: Competence of the Income-tax Officer to pass a separate order levying interest u/s 215 The primary question was whether an independent order levying interest u/s 215 is competent and can be passed by the assessing authority. The court examined the relevant provisions and the scheme of the Income-tax Act, 1961. It was observed that sections 139(8), 215, and 217 do not expressly state when or how the levy of interest should be made, nor do they bar a separate order being passed levying interest. The court noted that the levy of interest is part of the process of assessment but does not necessarily need to be included in the same order of assessment. The court concluded that the Income-tax Officer is competent to pass a separate order levying interest u/s 215, provided it is within the period prescribed for the assessment u/s 153. Issue 2: Validity of the order levying interest u/s 215 beyond the period prescribed u/s 153 The court addressed whether the order annexure A, dated October 7, 1978, was valid given that it was passed beyond the period prescribed by section 153. The assessment year in question was 1975-76, and the order of assessment should have been passed on or before March 31, 1978. Since the order was passed beyond this period, it was deemed invalid. The court held that while the Income-tax Officer could pass a separate order levying interest, it must be done within the period prescribed for the assessment u/s 153. Consequently, the order annexure A was invalid due to being passed beyond the prescribed period. Conclusion: The court held that an order charging interest u/s 215 can be passed separately from the assessment order but must be within the period prescribed for the assessment u/s 153. The order annexure A in this case was invalid as it was passed beyond that period. The Revenue succeeded on the question of law, but the assessee won the case due to the limitation issue. The question referred was answered in the affirmative, in favor of the assessee and against the Revenue. There was no order as to costs.
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