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2020 (10) TMI 501 - AT - Income TaxInterest u/s 244A - maintainability of the appeal against the order of the Assessing Officer and levying the interest under section 220(2) in pursuant to the order/judgment of the appellate forum - HELD THAT - Tax liability of the assessee is varied from as it was at the time of the original assessment order passed u/s 143(3) due to the reason of levy of interest u/s 220(2) as well as interest under section 234D though the AO has also raised the demand by adding an amount on account of withdrawal of interest u/s 244A which was granted along with the refund. CIT (Appeals), has dismissed the appeal of the assessee in limine being not maintainable as the said order of the Assessing Officer in computing the Income-tax liability/demand is not appealable - assessee has relied upon a series of decisions in support of the contention that the order passed by the Assessing Officer in pursuant to the appellate authority is an appealable order. It is pertinent to note that there are divergent views on this issue about the maintainability of the appeal against the order of the Assessing Officer and particularly levying the interest under section 220(2) in pursuant to the order/judgment of the appellate forum. Commissioner of Income-tax relied upon the judgment of ANZ Grindlays Bank PLC 1999 (8) TMI 29 - CALCUTTA HIGH COURT whereas the learned authorised representative of the assessee has relied upon a series of decisions of other High Courts in support of his contention. So far as the recomputation of the total income of the assessee AO has not passed any order or decided any issue but he has simply computed the total income as it was determined while passing the original assessment order. Therefore, to that extent the said order AO cannot be regarded as a decision of the Assessing Officer which can be challenged in the appeal until and unless some calculation mistake or typographical mistake occurred which can be rectified under section 154 of the Income-tax Act. Computation of Income-tax liability of the assessee in pursuant to the said order certainly increased the demand which was raised at the time of original assessment order passed under section 143(3) and further since after the order of the Tribunal there was no demand outstanding against the assessee and, therefore, it becomes a debatable question whether the interest under section 220(2) will be reckoned from the original demand arising from the assessment order passed under section 143(3) or it will be reckoned from the giving effect order passed by the Assessing Officer to the judgment of the hon'ble High Court. This aspect requires application of mind and also to take a decision whether the interest under section 220(2) has to be levied for the period reckoning from the original demand till the recomputation of Income-tax as per the outcome of the finality of the dispute. Once the Assessing Officer has to take a decision regarding the reckoning of the period from which the interest has to be calculated on the outstanding demand then the said order of the Assessing Officer would certainly be challenged by filing appeal before the Commissioner of Income-tax (Appeals) under section 246 - Appeals of the assessee are allowed for statistical purposes.
Issues Involved:
1. Maintainability of the appeal against the appeal effect order passed by the Assessing Officer. 2. Charging of interest under section 220(2). 3. Charging of interest under section 234D. 4. Withdrawal of interest under section 244A. Detailed Analysis: 1. Maintainability of the Appeal: The primary issue is whether the appeal filed by the assessee against the appeal effect order passed by the Assessing Officer, in compliance with the judgment of the Rajasthan High Court, is maintainable under section 246A. The learned Commissioner of Income-tax dismissed the appeal on the grounds that the appeal effect order is not an appealable order. The assessee argued, relying on various High Court judgments, that the appeal effect order is indeed appealable. The Tribunal noted the divergent views on this issue and concluded that the appeal is maintainable, particularly when the Assessing Officer's order involves the computation of tax liability and interest, which can be challenged under section 246 of the Income-tax Act. 2. Charging of Interest under Section 220(2): The assessee contested the interest charged under section 220(2) of the Income-tax Act. The Assessing Officer had levied this interest while giving effect to the High Court's judgment. The Tribunal observed that the computation of interest under section 220(2) requires a decision on the period from which the interest is to be calculated. This decision-making process by the Assessing Officer makes the order appealable. The Tribunal cited the Delhi High Court's judgment in Televista Electronics Ltd. v. Dy. CIT, which held that such orders are appealable when they enhance the assessment or reduce a refund. 3. Charging of Interest under Section 234D: The assessee also challenged the interest charged under section 234D. The Tribunal noted that this interest pertains to the refund granted earlier, which was subsequently withdrawn following the High Court's judgment. The Tribunal did not delve deeply into this issue separately but implied that it falls within the ambit of the appealable order, as it affects the total tax liability. 4. Withdrawal of Interest under Section 244A: The interest under section 244A, which was initially granted along with the refund, was withdrawn by the Assessing Officer. The Tribunal acknowledged that the withdrawal of interest under section 244A is a consequence of the High Court's judgment and forms part of the appealable order. The Tribunal emphasized that any decision impacting the tax liability, including interest computations, is subject to appeal. Conclusion: The Tribunal set aside the orders of the learned Commissioner of Income-tax and remanded the matter for a decision on the merits. The Tribunal's decision was based on the principle that orders affecting the tax liability, including interest computations, are appealable under section 246 of the Income-tax Act. The appeals for the assessment years 2002-03, 2003-04, and 2004-05 were allowed for statistical purposes.
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