2013 (12) TMI 1008 - AT - Income Tax

Demand u/s 220 - Appealable or not - Held that - The giving effect orders show revised computation of total income based on appellate orders - If these were simply orders levying interest under Section 222(2) of the Act, it might not have been appealable. But, this particular levy of interest under Section 220(2) is only one of the many items considered in these orders - It can therefore be deemed either as an order passed under Section 154 or passed under Section 143(3) read with Section 250 and 251 of the Act - Following assessee s own case for assessment year 2006-07 - The assessee has support of Circular No.334 dated 3.4.1982 of CBDT under which any part of the giving-effect order could be assailed by the assessee - The issue was set aside for fresh adjudication.

Summary

Issues:
Levy of interest under Section 220(2) of the Income-tax Act, 1961 on giving-effect orders appealability.

Analysis:

Levy of Interest under Section 220(2):
The appeal concerned the aggrievement of the assessee regarding the levy of interest under Section 220(2) of the Income-tax Act, 1961. The original assessment disallowed the expenditure claimed by the assessee towards the replacement of machinery. Despite subsequent appeals, including to the Hon'ble jurisdictional High Court and the Hon'ble Apex Court, the matter was remanded back to the CIT(Appeals) for reconsideration. Following the CIT(Appeals)'s decision, giving-effect orders were issued by the Assessing Officer, including the levy of interest under Section 220(2). The CIT(Appeals) initially held that such orders were not appealable, leading to the present appeal.

Appealability of Giving-Effect Orders:
The core issue revolved around the appealability of the giving-effect orders, particularly concerning the levy of interest under Section 220(2). The Tribunal analyzed the nature of these orders, noting that they involved revised computations based on appellate decisions. The Tribunal highlighted that while orders solely levying interest under Section 220(2) might not be appealable, in this case, the interest was part of a broader revised determination of total income. Drawing on precedents, the Tribunal concluded that the giving-effect orders fell within appealable orders under Section 246(1) of the Act. Notably, conflicting decisions from different High Courts were considered, emphasizing the need for a fresh consideration of the appeal, especially in light of the Circular No.334 dated 3.4.1982 of CBDT, which could benefit the assessee.

Decision:
Ultimately, the Tribunal allowed the appeals for statistical purposes, setting aside the orders of the CIT(Appeals) and remitting the issue of the levy of interest under Section 220(2) back for fresh consideration in accordance with the law. The decision underscored the complexity of appealability concerning giving-effect orders and the importance of considering all relevant factors, including applicable circulars and conflicting judicial decisions.

This comprehensive analysis of the judgment delves into the intricacies of the issues involved, providing a detailed understanding of the legal reasoning and conclusions reached by the Tribunal.