This appeal of revenue relates to assessment year 1981-82 and arise out of order of AAC, dated 19-3-1983. revenue contests appeal on ground that on facts and in circumstances of case, AAC erred in deleting interest charged under section 139(8) /215/21 7 of Income-tax Act, 1961 ('the act'). 2. brief facts of case are as under: assessee held one-seventh beneficial interest in Bhatia Family Trust. share of her income assessable in this year amounted to Rs. 28,572. As no return had been filed by assessee under section 139(1) , ITO issued notice under section 148 of Act on 7- 7-1982 which was served on assessee on 13-7-1982. Even before notice under section 148 was served on assessee, assessee had filed return on 12-7-1982. In order passed by ITO under section 143(3) , read with section 147(a). of Act, he directed levy of interest under section 139 and 215 . 3. On appeal before AAC, point which came up for consideration before him is whether appeal objecting to levy of penal interest alone is maintainable or not. ITO relying on decision of Gujarat High Court in case of CIT v. Sharma Construction Co. [1975] 100 ITR 603 contended that appeal objecting to levy of penal interest alone is not maintainable. learned counsel for assessee, on other hand, contended that appeal is maintainable because assessee is denying her liability to be assessed to penal interest. In support of aforesaid proposition he relied on decision of Bombay High Court in case of CIT v. Daimler Benz A. G. [1977] 108 ITR 961 (FB). He also relied upon decision of Karnataka High Court in National Products v. CIT [1977] 108 ITR 935. He further contended that in subsequent decision, namely, in case of Bhikhoobhai N. Shah v. CIT [1978] 114 ITR 197, Gujarat High Court explained case in Sharma Construction Co. (supra) relied upon by ITO and their Lordships have held that if assessee denies his liability to pay penal interest at all, appeal would lie. Further, relying upon decision of Bombay High Court in case of CIT v. Gannon Dunkerley & Co. Ltd. [1971] 79 ITR 637 he argued that all grounds taken fairly read to say that no interest was chargeable at all then appeal would be competent. He claimed that in this case this exactly is sum and substance of grounds of appeal. counsel also relied upon order of Commissioner (Appeals) dated 7-5-1982 in case of Ravindra Jaiswal for assessment year 1978-79 wherein on identical facts appeal was held to be maintainable. Alternatively, counsel argued that if appeal is not maintainable under clause (c) of section 245(1) of Act, it is maintainable under clause (e). In this case it is not disputed that assessment has been made in course of proceedings initiated under section 147(a). Therefore, it is indeed assessment under section 147 against which appeal falls under clause (e) of section 246(1). According to him, in such appeal there is no restriction as to point which assessee may agitate. In support of aforesaid proposition, he relied upon decision of Calcutta High Court in cause of Surajmal Ganeshram v. CIT [1979] 120 ITR 715. He, therefore, contended that order for levy of interest under sections 139 and 215 part of order under section 147 and interest levied can be agitated in appeal under clause (e) of section 246(1). On merits, counsel argued that interest under section 139 can be charged with reference to tax payable on total income as determined on regular assessment only. With regard to interest under section 215 same can be charged up to date on 'regular assessment' only. According to him, regular assessment is not same thing as in assessment under section 147. For aforesaid proposition, he relied upon decision of Bombay High Court in case of D. Swarup, ITO v. Gammon India Ltd. [1983] 141 ITR 841. After hearing learned counsel for assessee, AAC following ratio of Bombay High Court in case of Daimler Benz A. G. (supra) held that so far as interest under section 215 /217 is concerned, matter is fully covered by aforesaid decision, as according to him, levy of interest can be challenged but only when assessee denies his liability to assessee advance tax. Insofar as interest under section 139 is concerned, he relied upon decision of Bombay High Court in case of CIT v. S. J. Mehta (sic) and held that no appeal against interest under section 139 is competent. AAC accepting alternative argument of learned counsel for assessee held that appeal against charging of interest under section 139 and 215 is admissible. Further, relying on decision of Bombay High Court mentioned supra, he deleted interest charged by ITO under sections 139 and 215 as against this order of AAC, revenue is in appeal before us. 4. At time of hearing of appeal, learned departmental representative raised additional ground of appeal namely, on facts and in circumstances of case, AAC erred in entertaining appeal against charging of interest under section 139(8) /215/21 7. 5. T he learned departmental representative contended before us that notice under section 148 was issued on 7-7-1982 and served on assessee o n 13-7-1982. assessee had filed return on 12-7-1982, that is, even before receipt of notice. He therefore, contended that order passed by ITO is not one passed in reassessment proceedings, but one passed in regular proceedings. He submitted that section has been wrongly quoted by ITO as section 143(3) read with section 147(a). Since ITO has wrongly quoted section same, according to him is curable under section 292B of Act. He submitted that order of AAC is erroneous inasmuch as he erred in entertaining appeal and also deleting interest. He distinguished decision of Calcutta High Court in Surajmal Ganeshram's case (supra) wherein Calcutta High Court has held that appeal against order under section 147 can also cover ground relating to levy of interest and there was no restriction on ground raised in such appeal. According to him, point that came up before Calcutta High Court in aforesaid case is question of jurisdiction. Their Lordships of Calcutta High Court, considering jurisdictional issue held that appeal was maintainable whereas in case in question since assessee denied liability to be assessed to interest, appeal is not maintainable. He further relied on decision of Bombay High Court in case of Daimler Benz A. G. (supra) in support of his contention that appeal is not maintainable. 6. learned counsel for assessee did not seriously challenge to admission of additional ground of appeal. He, however, contended that case of assessee is fully covered by decision of Calcutta High Court in case of Surajmal Ganeshram (supra) and there is no contrary decision of any other High Court on this point. He relied upon certain observations made by their Lordships of Calcutta High Court, in aforesaid decision appearing on pages 724 and 725, wherein they have further held that right of appeal from assessment or reassessment under section 147 appears to be general right and if such appeal is admitted, then it does not appear that assessee is confined to certain grounds and not others. Relying upon decision of Bombay High Court in Daimler Benz A. G.'s case (supra), counsel contended that assessee in this case has really denied his liability to levy of interest and, therefore, ratio laid down in aforementioned case will squarely apply to facts of this case. He further relied upon decision of Bombay High Court in Addl. CIT v. Mustakhusein Gulamhusein Ghia [1983] 143 ITR 951 wherein it was held that on appeal against order of assessment as whole, assessee is entitled to challenge levy of interest. To negative argument of learned departmental representative that assessment order passed by ITO is not one passed in reassessment proceedings, but one passed in regular proceedings, learned counsel for assessee contended that since assessee has filed return after issue of notice under section 148 , assessment order passed by ITO is order under section 143(3 , read with section 147 , and not order Supreme Court 143(3). In support of aforesaid proposition, he relied on decision of Allahabad High Court in Dr. Onkar Dutt sharma v. CIT [1967] 65 ITR 359 wherein it was held that initiation of proceedings under section 34 of Indian Income-tax Act, 1922 commence on issue notice under that section. Similar is view expressed by Patna High Court in Raja Bahadur Kamakhya Narayan Singh v. State of Bihar [1962] 45 ITR 516 and, in particular, he relied on observation at page 522. On merits he submitted that case of assessee is fully covered by Bombay High Court decision in case Gammon India Ltd. (supra) which is followed by Bench of Tribunal [IT appeal Nos. 106, 107 and 447 (Nag.) of [1983], dated 10-2-1984]. He, therefore, submitted that order of AAC is to be sustained on merits also. 7. We have carefully considered facts and circumstances of case and arguments advanced by both sides. at outset we find that ground relating to challenge on maintainability of appeal is raised at very late stage. In view of decision of Calcutta Bench of Tribunal in WTO v . Shiva Prasad Bagaria [1982] 2 ITD 449, additional ground taken by revenue is not maintainable. However, since counsel for assessee has not seriously challenged admission of additional ground, same is considered and disposed of on merits. Coming to appealability of order wherein assessee has challenged levy of interest, there cannot be iota of doubt that case of assessee is fully covered by decision of Calcutta High Court in Surajmal Ganeshram's case (supra). Whatever may be facts of that case, principle laid down by Calcutta High Court is that in appeal against order under section 147 , there is no restriction as to ground as is placed in section 246(c). We also find difference in language used in section 246(c) and (e) . Section 246(c) reads as under: "(c) order against assessee, where 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 assessee objects to amount of income assessed, or to amount of tax determined, or to amount of loss computed, or to status under which he is assessed:" Clause (e) of section 246 reads as under: "(e) order of assessment, reassessment or recomputation under section 147 or section 150;" On careful reading of aforesaid clauses, it is seen that separate appeal is provided to AAC against order of ITO passed under section 147. For deciding maintainability of appeal what is to be seen is whether order passed by ITO is order under section 143(3) or order under section 147. When once we hold that order [passed by ITO is one passed under section 147 , provision for appeal is found in clause (c) of section 246. If we accept argument of learned departmental representative, clause (e) of section 246 becomes redundant. We are, therefore, of considered opinion that appeal against order under section 147 challenging levy of interest is maintainable. appeal in question is admittedly against order under section 147(a) in light of proposition laid down by allahabad High Court and Patna High Court, mentioned supra, and is covered by clause (e) of section 246 and in such appeal, there is no restriction or limitation as to raising of any ground. Thus, preliminary objection raised by learned departmental representative is rejected. 8. Coming to merits, ITO himself has mentioned in order section under which he has passed order. When once notice is issued, ITO assumes jurisdiction and that jurisdiction is not lost by filing of return by assessee. Be that as it may, it is too late for us to consider at this stage that order was not passed by ITO under section 147(a) when he himself has quoted section under which he has passed order. When once it is held that assessment is framed under section 147(a) , case of assessee is fully covered by Bombay High Court's decision in Gammon India Ltd.'s case (supra) and view that Tribunal has taken in case of H. N. Malak (supra). 9. In result, appeal filed by revenue is hereby dismissed. *** FIRST INCOME TAX OFFICER v. KUMARI ALKA SATYAWAN BHATIA