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The judgment involves a challenge to an order passed u/s 220(2) of the Income-tax Act, 1961, by the Income-tax Officer, Companies Circle VII, Ahmedabad. Details of the Judgment: Issue 1: Compliance with Notice of Demand The petitioner contested the legality of the order u/s 220(2) as it demanded interest despite the petitioner complying with the notice of demand issued u/s 156 of the Income-tax Act. The petitioner had paid the demanded amounts as per various notices issued. The respondent passed the impugned order demanding interest, which the petitioner argued was illegal. Issue 2: Interpretation of Section 220(2) The court analyzed the provisions of section 220(2) of the Income-tax Act, which stipulate that interest can be levied if the assessee fails to comply with the notice of demand u/s 156. Since the petitioner had adhered to the notice of demand, the court concluded that the provisions of section 220(2) were not applicable in this case. Conclusion The court allowed the special civil application, quashing and setting aside the order demanding interest from the petitioner. The court emphasized the unambiguous nature of the provisions and did not find it necessary to refer to other court decisions. The respondent was directed to refund the amount demanded with interest to the petitioner based on the interim order passed earlier.
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