JUDGMENT B.P. Jeevan Reddy, C.J.
1. Under Section 256(2) of the Income-tax Act, 1961, the Tribunal has stated the following question :
"Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the appeal against the levy of interest under Section 215 of the Income-tax Act, 1961, was entertainable and directing the Appellate Assistant. Commissioner to decide the matter afresh ?"
2. The appeal in this case was not confined to interest alone. The appeal was preferred on merits questioning the quantum. One of the grounds related to interest. The Tribunal has followed the decision of the Gujarat High Court in CIT v. Sharma Construction Co. [1975] 100 ITR 603, and held that the appeal with respect to interest also is maintainable. Since the Appellate Assistant Commissioner has not gone into the said aspect, the Tribunal remitted the matter to the Appellate Assistant Commissioner for examining the said issue afresh. Thereupon, the Revenue obtained this reference.
3. The controversy raised is now concluded by the decision of the Supreme Court in Central Provinces Manganese Ore Co. Ltd. v. CIT [1986] 160 ITR 961. It is held that levy of interest is part of the process of assessment and that where the assessee disputes the levy, i.e., the assessment itself in appeal, he is also entitled to question the levy of interest, though an appeal on the question of interest alone is not maintainable.
4. Following the said decision, the question referred is answered in the affirmative, i.e., in favour of the assessee and against the Department. No costs.