B.S. Dhillon, J.
1. The assessee is an HUF and the assessment year under reference is 1967-68 of which the relevant previous year ended on 31st March, 1967. In the assessment order made by the ITO for this assessment year on 28th February, 1972, he charged penal interest amounting to Rs. 1,992 under Section 139(1) of the I.T. Act (hereinafter referred to as ' the Act '). The interest so charged was included in the notice of demand served on the assessee under Section 156 of the Act.
2. The assessee preferred an appeal to the AAC contending that the levy of penal interest was illegal and was not warranted by the facts of the case. The AAC dismissed the appeal in limine, vide his order dated 8th August, 1972, on the short ground that no appeal lay on the point. The AAC did not go into the merits of the assessee's appeal.
3. The assessee filed an appeal before the Income-tax Appellate Tribunal, Delhi Bench (B) (hereinafter referred to as ' the Tribunal '). The Tribunal, vide its order dated the 19th December, 1973, accepted the appeal of the assessee holding that the appeal filed by the assessee was competent.
4. At the instance of the revenue, the following question of law has been referred to this court for its opinion by the Tribunal :
' Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that an appeal lay from the order of the Income-tax Officer levying interest under Section 139(8) of the Income-tax Act, 1961 '
5. The provisions of Sub-section (8) of Section 139 of the Act are as follows : ' 139(8)(a). Where the return under Sub-section (1) or Sub-section (2) or Sub-section (4) for an assessment year is furnished after the specified date, or is not furnished, then (whether or not the Income-tax Officer has extended the date for furnishing the return under Sub-section (1) or Sub-section (2)) the assessee shall be liable to pay simple interest at twelve per cent. per annum, reckoned from the day immediately following the specified date to the date of the furnishing of the return, or, whereno return has been furnished, the date of completion of the assessment under Section 144, on the amount of the tax payable on the total income as determined on regular assessment, as reduced by the advance tax, if any, paid, and any tax deducted at source :
Provided that the Income-tax Officer may, in such cases and under such circumstances as may be prescribed, reduce or waive the interest payable by any assessee under this sub-section.
Explanation 1.--For the purposes of this sub-section, ' specified date ', in relation to a return for an assessment year, means,--
(a) in the case of every assessee whose total income, or the total income of any person in respect of which he is assessable under this Act, includes any income from business or profession, the date of the expiry of four months from the end of the previous year or where there is more than one previous year, from the end of the previous year which expired last before the commencement of the assessment year, or the 30th day of June of the assessment year, whichever is later ;
(b) in the case of every other assesses, the 30th day of June of the assessment year.
Explanation 2.--For the purposes of this sub-section, where the assessee is a registered firm or an unregistered firm which has been assessed under Clause (b) of Section 183, the tax payable on the total income shall be the amount of tax which would have been payable if the firm had been assessed as an unregistered firm. (b) Where as a result of an order under Section 154 or Section 155 or Section 250 or Section 254 or Section 260 or Section 262 or Section 264, the amount of tax on which interest was payable under this sub-section has been reduced, the interest shall be reduced accordingly, and the excess interest paid, if any, shall be refunded.'
6. Under Rule 117A framed under this sub-section, the ITO has been empowered to reduce or waive the interest payable under Section 139 in the cases and in the circumstances mentioned therein.
7. The provisions of Section 246(1)(c) of the Act are as follows :
' 246. (1) Subject to the provisions of Sub-section (2) any assessee aggrieved by any of the following orders of an Income-tax Officer may appeal to the Appellate Assistant Commissioner against such order--...
(c) an order against the assessee, where the assessee denies his liability to be assessed under this Act or any order of assessment under Sub-section (3) of Section 143 or Section 144, where the assessee objects to the amount of income assessed, or to the amount of tax determined, or to the amount of loss computed, or to the status under which he is assessed.'
8. Section 264 makes provision for the revision of other orders.
9. It is a well-settled principle of law that the right of appeal is a creature of the statute. If the statute provides the right of appeal, the appeal is competent, but in case there is no provision for filing an appeal provided in the statute regarding a particular matter, no appeal shall lie. The reading of the provisions of Section 246(1)(c) of the Act would clearly go to show that the assessee can file an appeal against an order where the assessee is liable to be assessed under the Act or against any order of assessment under Sub-section (3) of Section 143 or Section 144 where the assessee objects to the amount of income assessed or to the amount of tax determined or to the amount of loss computed or to the status under which he is assessed. There is no mention in this provision that an appeal shall lie against an order passed under Sub-section (8) of Section 139 of the Act simpliciter. It of course goes without saying that if the assessee has challenged the order under appeal on any of the grounds mentioned in Section 246(1)(c), and consequently the liability to pay penal interest is also challenged, the appeal would be competent. This is so because the question of interest is directly linked with the quantum of tax in view of the provisions of Section 139(8) of the Act. But in case the appeal does not fall within the ambit of the provisions of Section 246(1)(c), the appeal against an order passed under Section 139(8) simpliciter, will not be competent. The view we are taking finds support from the decisions of the Gujarat, Madras and Bombay High Courts. Reference in this connection may be made to the decisions of the Gujarat High Court in CIT v. Sharma Construction Co. : 100ITR603(Guj) and Bhikhoobhai N. Shah v. CIT : 114ITR197(Guj) , the Madras High Court in Rajyam Pictures v. Addl. CIT : 114ITR847(Mad) and that of the Bombay High Court in CIT v. Cannon Dunkerley & Co. Ltd. : 119ITR595(Bom) .
10. The Tribunal clearly fell into error in relying on a decision of their Lordships of the Supreme Court in CIT v. Kanpur Coal Syndicate : 53ITR225(SC) . In that case, their Lordships held that the ' denial of liability ' is comprehensive enough to take in not only the total denial of liability but also the liability to tax under particular circumstances. This proposition of law is unexceptionable but the question of payment of penal interest under Section 139(8) of the Act, if linked with the liability to pay tax, would certainly be appealable, but if the payment of penal interest is challenged simpliciter without challenging the liability to pay tax in that case, the provisions of Section 246(1)(c) of the Act will not be attracted and no appeal will be competent. In such a case revision under Section 264 may be maintainable.
11. For the reasons recorded above, the question of law referred to us is answered in the negative, i.e., in favour of the revenue and against the assessee. Since there is no representation on behalf of the assessee, there will be no order as to costs.
Gokal Chand Mital, J.
12. I agree.