AJIT K. SENGUPTA, J. ( 1 ) AT the instance of the Commissioner, West Bengal IX, the following questions of law have been referred to this court under Section 256 (1) of the Income-tax Act, 1961 ("the Act"), for the assessment year 1964-65 :" (1) Whether, on the facts and in the circumstances of the case, the Tribunal is correct in interpreting the additional ground raised by the assessee at the hearing of the appeal as meaning that the charging of interest under Section 139 (1) of the Income-tax Act, 1961, in the assessment is not valid for the reason that the Income-tax Act does not provide for the charging of interest under Section 139 (1) in a case where the assessee had not applied for extension of time for the filing of the return. (2) Whether, on the facts and in the circumstances of the case, the Tribunal had no jurisdiction to direct the Appellate Assistant Commissioner to decide a ground regarding the charging of interest under Section 139 (1) of the Income-tax Act, 1961, a ground that was not raised by the assessee in the appeal before the Appellate Assistant Commissioner. (3) Whether the Tribunal is correct in holding that the Income-tax Act, 1961, contains provisions for an appeal before the Appellate Assistant Commissioner against the levy of interest under Section 139 of the said Act and in directing the Appellate Assistant Commissioner to adjudicate upon the issue regarding the correctness of the levy of interest under the said Section 139 (1 ). " ( 2 ) THE facts relating to this reference are shortly stated as hereunder : for the assessment year 1964-65, a notice under Section 139 (2) of the Act was served upon the assessee-firm on June 9, 1964, and its return was due by July 9, 1964. The notice was, however, not complied with, nor did the assessee ask for extension of time for filing the return. The return was eventually filed on December 31, 1966. While completing the assessment, the Income-tax Officer charged interest under Section 139. The assessee-firm preferred an appeal before the Appellate Assistant Commissioner challenging various additions and disallowances made by the Income-tax Officer in computing the income, but no ground was raised before the Appellate Assistant Commissioner disputing the charging of interest under Section 139. While completing the assessment, the Income-tax Officer charged interest under Section 139. The assessee-firm preferred an appeal before the Appellate Assistant Commissioner challenging various additions and disallowances made by the Income-tax Officer in computing the income, but no ground was raised before the Appellate Assistant Commissioner disputing the charging of interest under Section 139. The Appellate Assistant Commissioner had, therefore, no occasion to deal with the issue regarding charging of interest under Section 139. ( 3 ) AGAINST the order of the Appellate Assistant Commissioner, the asses-see-firm preferred appeal and the Department also preferred appeal. In the grounds of appeal originally filed before the Tribunal, the assessee did not raise any ground disputing the charging of interest under Section 139 but, at the hearing of the appeal on July 12, 1976, the assessee filed an additional ground which read as follows : "the charge of interest under Section 139 has been ultra vires the Income-tax Act and is liable to be struck off. " ( 4 ) THE Revenue opposed the admission of this additional ground on the ground that the Tribunal was not competent to go into the vires of any of the provisions of the Act under which it was constituted. On behalf of the assessee it was, however, explained that the validity of any of the provisions of the Act was not sought to be challenged and what was disputed in and by way of the additional ground was that the charging of interest under Section 139 (1) in the assessment was not valid because the said section provided for the charging of interest only in a case where the assessee applied for extension of time for the filing of the return and that in the instant case the assessee had not filed any application for extension of time for the filing of the return. On a consideration of the rival submissions, the Tribunal recorded in paragraph 4 of the consolidated order disposing of the assessee's appeal and the Department's appeal the following finding ;"the ground is no doubt not happily worded ; but it is not as if the vires of any of the provisions of the Income-tax Act is challenged before us by this ground. As explained by learned counsel for the assessee, what the assessee means to say is that the charging of interest under Section 139 (1) in the assessment order is not valid for the reason that the Income-tax Act provides for the charging of interest under Section 139 (1) thereof only in a case where the assessee applied for extension of time for the filing of the return, but, in the present case, the assessee had not filed any such application for extension of time. We are of the view that the additional ground, though not happily worded, admits of the interpretation placed upon it by learned counsel. As this additional ground is purely a legal one and does not involve investigation of fresh facts, we admit the same. On the question as to whether interest under Section 139 can be charged in a case where the assessee had not applied to the Income-tax Officer for extension of time for the filing of the return, there is no doubt conflict of opinion among the various High Courts. The Andhra Pradesh High Court in the decision in Kishanlal Haricharan v. ITO [1971] 82 ITR 660 and the Delhi High Court in the decision in 57 ITR 639 (sic ) have expressed a view against the Department and held that no interest can be charged under Section 139 in a case where the assessee has not applied for extension of time for the filing of the return. But our attention has been drawn in some other case to the latest unreported decision of the Calcutta High Court in Gunendra Chandra De v. ITO (C. R. No. 1203 (W) of 1972 dated August 6, 1975) holding that in a case where the assessee had not applied for time, no penal interest under Section 139 (1) should be charged before April 1, 1972. The decisions in favour of the Department on this issue are those reported in 85 ITR 566 (sic) and Ganesh Das Sreeram v. ITO [1974] 93 ITR 19 (Gauhati ). Since we are sending back some other issues arising out of those appeals to the Appellate Assistant Commissioner to consider this issue also in the light of the aforementioned unreported ruling, some in favour of the Department and some against the Department, especially the latest unreported ruling of the Calcutta High Court in the case of Gunendra Chandra De (supra) (sic ). " ( 5 ) IN our view, the questions sought to be raised are now concluded by the decisions of the Supreme Court. ( 6 ) GANESH Dass Sreeram v. ITO [1988] 169 ITR 221. There, the Supreme Court held that interest charged for late filing of the return is levied by way of compensation and not by way of penalty. It is leviable under proviso (iii) to Section 139 (1), where returns are submitted voluntarily under Section 139 (4) beyond the period mentioned in Section 139 (1) or (2) before assessment and before the end of the four assessment years mentioned therein, even if no application has been made for extension of time to file the return. The Supreme Court, in that case, proceeded to hold as follows (at p. 226) :"sub-section (4) is a substantive provision and it does not provide for making an application to the Income-tax Officer for the purpose of extension of the date for the furnishing of the return. What is provided in Sub-section (4) is that even though a person does not furnish the return within the time allowed to him under Sub-section (1) or Sub-section (2), yet he may furnish the same before the end of the four assessment years concerned. The substantive provisions of Sub-sections (1) and (2) of Section 139 specify the time within which the return has to be filed. The provisos to Sub-sections (1) and (2) confer power on the Income-tax Officer to extend the date for filing the return on an application in that regard made by the assessee. So, it is clear that the expression 'time allowed' in subsection (4) of Section 139 is not confined only to the extension of time granted by the Income-tax Officer, but also to the time originally fixed for the filing of returns under Sub-sections (1) and (2) of Section 139 of the Act. So, it is clear that the expression 'time allowed' in subsection (4) of Section 139 is not confined only to the extension of time granted by the Income-tax Officer, but also to the time originally fixed for the filing of returns under Sub-sections (1) and (2) of Section 139 of the Act. There may be two types of cases in the late filing of returns, namely, (1) the assessee, after getting the date extended by the Income-tax Officer under Sub-section (1) or Sub-section (2) of Section 139 of the Act, does not file the return within the extended date, but files the same before the end of the four assessment years concerned ; and (2) the assessee, without filing any application for extension of time, files the return beyond the period mentioned in Sub-section (1) or Sub-section (2) but before the end of the four assessment years in question. In either case, the provision of Clause (iii) of the proviso to Sub-section (1) of Section 139 will apply. In other words, the Income-tax Officer will be entitled to charge interest on the amount of tax in accordance with the provision of Clause (iii) of the proviso to Sub-section (1) of Section 139. Thus, where time has been extended by the Income-tax Officer on an application made in that regard by the assessee arid the assessee does not file the return within the time allowed and where no such application has been made by the assessee, but the return is filed by him beyond the time allowed, but before the end of the four years concerned, in either case, the Income-tax Officer will be entitled to charge interest in accordance with the provision of Clause (iii) of the proviso to Sub-section (1) of Section 139 of the Act. There is, therefore, no substance in the contention of the appellants that as the appellants had not made any application praying for the extension of time for the filing of returns, the Income-tax Officer had no authority to charge interest under the provision of Clause (iii) of the proviso to Sub-section (1) of Section 139 of the Act. " ( 7 ) IN our view, having regard to the aforesaid decision of the Supreme Court, the first question must be answered in the negative and in favour of the Revenue. " ( 7 ) IN our view, having regard to the aforesaid decision of the Supreme Court, the first question must be answered in the negative and in favour of the Revenue. ( 8 ) SO far as the second question is concerned, reliance has been placed on the judgment of the Supreme Court in the case of Central Provinces Manganese Ore Co. Ltd, v. CIT [1986] 160 ITR 961. There, the Supreme Court held that levy of interest is part of the process of assessment. Inasmuch as the levy of interest is a part of the process of assessment, it is open to an assessee to dispute the levy in appeal provided he limits himself to the ground that he is not liable to the levy at all. In that case before the Supreme Court, the question was whether orders levying interest under Sub-section (8) of Section 139 and under Section 215 are appealable under Section 246 of the Act. In that context, the Supreme Court held as follows (at p. 966) :"now, the question is whether orders levying interest under Subsection (8) of Section 139 and under Section 215 are appealable under Section 246 of the Income-tax Act. Clause (c) of Section 246 provides an appeal against an order where the assessee denies his liability to be assessed under the Act or against any assessment order 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. Inasmuch as the levy of interest is a part of the process of assessment, it is open to an assessee to dispute the levy in appeal provided he limits himself to the ground that he is not liable to the levy at all. " ( 9 ) IN our view, the said decision has no relevance on the facts of this case. The Supreme Court in the case of CIT v. Mahalakshmi Textile Mills Ltd. [1967] 66 ITR 710 held as follows (at p. 713) :"under Sub-section (4) of Section 33 of the Indian Income-tax Act, 1922, the Appellate Tribunal is competent to pass such orders on the appeal 'as it thinks fit'. The Supreme Court in the case of CIT v. Mahalakshmi Textile Mills Ltd. [1967] 66 ITR 710 held as follows (at p. 713) :"under Sub-section (4) of Section 33 of the Indian Income-tax Act, 1922, the Appellate Tribunal is competent to pass such orders on the appeal 'as it thinks fit'. There is nothing in the Income-tax Act which restricts the Tribunal to the determination of questions raised before the departmental authorities. All questions whether of law or of fact which relate to the assessment of the assessee may be raised before the Tribunal. If for reasons recorded by the departmental authorities in rejecting a contention raised by the assessee, grant of relief to him on another ground is justified, it would be open to the departmental authorities and the Tribunal, and indeed they would be under a duty, to grant that relief. The right of the assessee to relief is not restricted to the plea raised by him. " ( 10 ) IN our view, since the ground was urged before the Tribunal although not specifically raised before the Appellate Assistant Commissioner or before the Tribunal in the grounds of appeal, the Tribunal was competent to decide the issue raised before the Tribunal. In that view of the matter, we answer the second question in the negative and in favour of the assessee. ( 11 ) WE now turn to the third question. In Central Provinces Manganese Ore Co. Ltd. 's case [ 1986] 160 ITR 961, the Supreme Court after holding that no appeal lay against an order under Section 139 (8) directed the assessee to make an application before the concerned authority for waiver of interest. Since we have held that the Tribunal is competent to deal with all the grounds pertaining to the assessment, the Tribunal could either direct the Income-tax Officer or the Appellate Assistant Commissioner to go into the question regarding charging of interest under Section 139 (1 ). In our view, having regard to the facts and circumstances of the case, the Tribunal was justified in directing the Appellate Assistant Commissioner to adjudicate upon the issue regarding the correctness of the levy of interest under Section 139 (1 ). ( 12 ) IN that view of the matter, we answer the third question in the affirmative and in favour of the assessee. ( 13 ) THERE will be no order as to costs.