1990 (11) TMI 206 - AT - Income Tax

Advance Tax, Appellate Assistant Commissioner, Assessed Tax, Collection And Recovery, Interest Payable By Assessee, Provisional Assessment, Regular Assessment, Tax Deducted At Source

Summary

Issues:
- Appeal against levy of interest under sections 215 and 220(2)
- Treatment of tax refunded on provisional assessment for charging interest under section 215
- Levy of interest under section 220(2) after full compliance with notice of demand

Analysis:

1. The first issue in this judgment pertains to the appeal against the levy of interest under sections 215 and 220(2). The Revenue contended that no appeal was maintainable before the CIT(A) regarding the interest levied. However, the Tribunal held that the appeal filed by the assessee was maintainable under section 246(c) as it disputed the correctness of the interest calculation, not seeking waiver or reduction. The Tribunal rejected the Revenue's contention based on a Supreme Court ruling, emphasizing the distinction between disputing liability and seeking waiver or reduction.

2. The second issue addresses the treatment of tax refunded on provisional assessment for charging interest under section 215. The assessing officer included the refunded tax amount in the tax determined for charging interest, contrary to the definition of assessed tax in section 215(5). The CIT(A) held that the refunded amount cannot be added to the tax determined on regular assessment. The Tribunal upheld the CIT(A)'s decision, emphasizing that the refunded tax amount should have been deducted from the tax determined based on regular assessment.

3. The final issue concerns the levy of interest under section 220(2) after full compliance with the notice of demand. The Revenue claimed interest from a later date, alleging a partial restoration of the demand. However, the Tribunal ruled that interest under section 220(2) is only applicable if the amount specified in the notice of demand is not paid within the specified period. Since the assessee fully complied with the demand notice within the prescribed period, the Tribunal rejected the Revenue's claim for interest from a later date. The Tribunal cited relevant case law and circulars to support its decision.

In conclusion, the Tribunal dismissed the appeals, upholding the CIT(A)'s orders for both assessment years. The judgment provides a detailed analysis of the issues related to the appeal against the levy of interest under sections 215 and 220(2), the treatment of tax refunded on provisional assessment, and the levy of interest post full compliance with the notice of demand.