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Interpretation of additional ground raised by the assessee regarding charging of interest under section 139(1) of the Income-tax Act, jurisdiction of the Tribunal to direct the Appellate Assistant Commissioner to decide on interest charging ground not raised by the assessee, correctness of the Tribunal's decision on provisions for appeal against levy of interest under section 139 of the Income-tax Act. Analysis: The case involved a reference to the High Court under section 256(1) of the Income-tax Act, 1961, regarding the interpretation of questions of law raised by the Commissioner, West Bengal IX, for the assessment year 1964-65. The primary issue was whether the Tribunal correctly interpreted the additional ground raised by the assessee at the appeal hearing, challenging the charging of interest under section 139(1) of the Act. The Tribunal admitted the additional ground, stating that it did not challenge the vires of the Act but disputed the validity of charging interest without an application for extension of time to file the return. The Tribunal noted conflicting views among High Courts on this issue but admitted the ground for being a legal one without fresh facts. The second issue revolved around the Tribunal's jurisdiction to direct the Appellate Assistant Commissioner to decide on the interest charging ground not raised by the assessee in the appeal before the Appellate Assistant Commissioner. The Tribunal relied on previous rulings and held that it was competent to decide on the issue raised before it, even if not specifically raised before lower authorities. The High Court answered this question in the negative and in favor of the assessee, affirming the Tribunal's competence to decide on the issue raised before it. The third issue concerned the correctness of the Tribunal's decision on provisions for appeal against the levy of interest under section 139 of the Income-tax Act. The High Court referenced the Supreme Court's decision in Ganesh Dass Sreeram v. ITO, where it was held that interest charged for late filing of the return is levied as compensation and not as a penalty. The Supreme Court clarified that interest could be charged even without an application for extension of time to file the return. Based on this decision, the High Court answered the first question in the negative and in favor of the Revenue. Additionally, the High Court held that the Tribunal was justified in directing the Appellate Assistant Commissioner to adjudicate on the correctness of the levy of interest under section 139(1), answering the third question in the affirmative and in favor of the assessee. In conclusion, the High Court's judgment addressed the interpretation of the additional ground raised by the assessee, the jurisdiction of the Tribunal to decide on issues not raised before lower authorities, and the correctness of the Tribunal's decision regarding the levy of interest under section 139(1) of the Income-tax Act for the assessment year 1964-65.
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