9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (10) TMI 1502 - AT - Income TaxLevy of interest under section 220(2) - selection of date to levy interest - Held that - The Assessing Officer has levied interest under the provisions of section 220(2) from the date of passing of the original assessment order whereas the original assessment order was set aside by the Tribunal and the same was remitted back to the Assessing Officer for deciding the matter afresh. Since a fresh assessment order has been passed by the Assessing Officer, the demand notice period specified under section 220(1) has to be taken into consideration from the date of passing of the fresh assessment order. The assessee is liable to pay demand within thirty days from the service of the demand notice in pursuance of the assessment order dated 21.12.2011. If the assessee fails to pay the amount demanded within the period specified under section 220(1), the assessee is liable to pay interest u/s.220(2) of the Act. On this issue, we do not agree with the findings of CIT(A). Our view is further fortified by the Hon ble Bombay High Court in the case of CIT Vs. Chika Overseas (P) Ltd. (2011 (11) TMI 118 - BOMBAY HIGH COURT ) and Vikrant Tyres Ltd. (2001 (2) TMI 129 - SUPREME Court). In view of our above finding, this ground of appeal of the assessee is allowed. The period specified under section 220(1) has to be taken into consideration from the date of passing of the fresh assessment order and not the earlier assessment order, which has been set aside. Accordingly, this issue is decided in favour of the assessee.
Issues:
Levy of interest under section 220(2) of the Income Tax Act. Analysis: The appeals were filed by the assessee against the Commissioner of Income Tax (Appeals) order confirming the levy of interest under section 220(2) of the Act for the assessment years 1995-96 and 1997-98. The initial assessments disallowed expenditure on machinery replacement, which was later challenged by the assessee. The High Court held that the expenditure was revenue in nature, leading to the Supreme Court remitting the matter back to the Commissioner of Income Tax (Appeals) for reconsideration. Subsequently, the Assessing Officer levied interest under section 220(2) from the date of the original assessment order, which was contested by the assessee. The issue revolved around the correct starting point for charging interest under section 220(2) - whether from the original assessment order or the fresh assessment order. The assessee argued, citing a previous decision in their own case for the assessment years 1994-95 and 1999-2000, that interest under section 220(2) should be charged from the fresh assessment order date, not the original assessment order date. The Departmental Representative, on the other hand, supported charging interest from the original assessment order date. The Tribunal referred to the previous decision in the assessee's case, where it was held that interest under section 220(2) should be charged from the date of the fresh assessment order. This decision was based on the principle that when an assessment order is set aside and a fresh assessment order is passed, interest should be charged from the date of the fresh order. The Tribunal also cited relevant legal precedents and circulars to support this interpretation. Ultimately, the Tribunal upheld the assessee's appeal, following the precedent set in their previous case and the legal principles governing the charging of interest under section 220(2). The appeals were allowed, and it was decided that interest under section 220(2) should be charged from the date of the fresh assessment order, not the original assessment order.
|
