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TMI Blog1990 (11) TMI 206X X X X Extracts X X X X X X X X Extracts X X X X ..... us. 2. In ITA No. 4766/87 which arises out of the assessment for assessment year 1979-80 the facts are : The assessee filed a return of income on29-6-1979showing nil income after adjustment of unabsorbed losses and unabsorbed investment allowance. There was tax deducted at source amounting to Rs. 31,123. A provisional assessment under section 141A was made on nil income and on31-12-1979the aforesaid amount of Rs. 32,123, which had been deducted from the assessee's income at source was refunded to the assessee. Thereafter a regular assessment was completed on14-7-1982on an income of Rs. 3,14,170. A demand of Rs. 2,52,178 resulted from the said assessment. This demand included a sum of Rs. 70,759 on account of interest under section 215. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 220(2) on the sum of Rs. 73,345 w.e.f.17-4-1984to20-2-1987. Such interest amounted to Rs. 30,969 and the amount of Rs. 73,345 was made up of the following items : 1. Tax demand Rs. 44,005 2. (a) Addl. interest under section 215 on an amount of Rs. 44,005 Rs. 17,160 (b) Interest under section 215 on an amount of Rs. 32,123 Rs. 9,630 3. Interest under section 244(1A) withdrawn Rs. 2,550 --------------------- Rs. 73,345 --------------------- 4. Against the order dated20-2-1987passed by the assessing officer giving effect to the Tribunal's order in the manner aforesaid the assessee filed an appeal before the CIT(A). The learned CIT(A) held that the amount of Rs. 32,123 cannot be treated as part of assessed tax within th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s aspect of the matter there was no dispute between the parties before us. The learned Departmental Representative, however, contended that the Hon'ble Supreme Court has held that the question whether a case is made out for waiver or reduction of the interest levied under section 215 or section 139(8) cannot be the subject matter of an appeal under section 246(c) of the Income-tax Act. This according to the Hon'ble Supreme Court was a matter which can more appropriately be dealt with by the Commissioner in exercise of his revisional jurisdiction. It was in this light that the Hon'ble Supreme Court held that no appeal lay in regard to the improper exercise of discretion to waive or reduce the interest. At page 967 of the Report the Hon'ble S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the basis of its own estimate is less than 75% of the assessed tax. Assessed tax has been defined in section 215(5) to mean the tax determined on the basis of the regular assessment reduced by the amount of advance-tax or tax deducted at source. In this case the assessing officer has taken the view that the amount of Rs. 32,123, which was the tax deducted from the income of the assessee and which was refunded to the assessee in terms of the provisional assessment, would also form part of the tax determined on regular assessment for charging interest under section 215. This action of the assessing officer is not shown to be authorised by any provision of law. The definition of assessed tax in section 215(5) is clear and you cannot add an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee through the demand notice was paid on19-8-1982, i.e., within the period specified in the demand notice. Thus, the assessee has fully complied with the provisions of section 220(1). It was thereafter that by virtue of an order passed by the CIT(A) the assessee was granted a refund on17-4-1984and by virtue of the Tribunal's order passed subsequently the demand was partially restored. According to the Revenue on the demand so restored the assessee is liable to pay interest in terms of section 220(2) from17-4-1984onwards. This contention is negatived by the plain terms of sub-section (2) of section 220. If the amount mentioned in the notice of demand is paid within the time allowed thereby this provision of law does not at all come into pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which the demand was not paid in terms of the demand notice and, therefore, the default within the meaning of section 220(2) had occurred and interest had started accruing. As is evident, in the case before us there was no default and, therefore, the liability to pay interest had not arisen. The view taken by the CIT(A), with which we agree, find support also from A. V. Thomas Co. Ltd. v. ITO [1982] 138 ITR 275 (Ker.). For the reasons discussed above, the appeal by the revenue has no force and is hereby rejected. 8. As regards the appeal for assessment year 1980-81 the points involved are identical and only the figures and dates differ, which we do not consider it necessary to mention here. They have already been mentioned in the order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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