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TMI Blog2013 (5) TMI 585X X X X Extracts X X X X X X X X Extracts X X X X ..... t can be charged u/s. 220(2) of the Act for the period when there is no demand outstanding. In the present case also the demand arises from the order passed u/s. 154/251/143(3) dated 07.11.2008 whereby addition of Rs.25 lakh was made disallowing the liability of PF and Gratuity. That means the AO has to recompute interest u/s. 220(2) in term of the above. AO is directed accordingly. Appeal of assessee is allowed. - I.T.A No.1234/Kol/2012 - - - Dated:- 13-5-2013 - Shri K. K. Gupta, AM And Shri Mahavir Singh, JM,JJ. For the Appellant : Shri B. K. Ghosh Pijush Dey, FCA For the Respondent: Shri K. N. Jana, Sr. DR ORDER Per Shri Mahavir Singh, JM:- This appeal by assessee is arising out of order of CIT(A)-XII, Kolkata in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act,1961 but there was a calculation mistake by the A.O.." 3. We have heard rival submissions and gone through facts and circumstances of the case. Briefly stated facts are that the original assessment was completed u/s. 143(3) of the Act on 27.11.2006. Subsequently, a notice u/s. 154 of the Act was issued on 23.08.2007 to rectify the mistake that the assessee company has claimed Provident Fund and Gratuity to the extent of Rs.76,89,463/- but it has not been paid within the statutory period as per tax audit report. The assessee filed documents and evidence but admitted that the amount of Rs.25,00,000/- is liable to be disallowed and AO vide his order u/s. 154/251/143(3) of the Act dated 07.11.2008 disallowed a sum of Rs.25 lakh by observ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,06,280/-. Thus, the charging of interest u/s. 220(2) of the I. T. Act, 1961 is restrictd to Rs.2,06,280/-." Aggrieved, assessee preferred appeal before us. 4. Ld. counsel for the assessee before us contended that in the present case AO did not make any addition of Rs.25 lakh either in the original assessment order u/s. 143(3) dated 27.11.2006 or in the appeal giving effect order u/s. 251/143(3) of the Act dated 30.11.2007. According to Ld. counsel, this addition of Rs.25 lakhs was made in the rectification order passed u/s. 154 of the Act dated 07.11.2008. In such circumstances, Ld. counsel for the assessee stated that the interest u/s. 220(2) of the Act can be charged after the demand notice u/s. 156 of the Act is served on the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder this section is that there should be a demand notice and there should be a default to pay the amount so demanded within the time stipulated in the said notice." The very foundation for a claim for interest under section 220(2) is the notice of demand. Without it there can be no sustainable claim for interest. In this case, the notice of demand that had been issued in 1979 became a dead letter when the consequential order was made by the Assessing Officer giving effect to the appellate order and the amount of tax payable was held to be "nil". The appellate order pursuant to which the consequential order was made itself became final, that order not having been challenged and carried up in further appeal. The rectifications made to that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an intention to lay the burden on the subject. In this process courts must adhere to the words of the statute and the so called equitable construction of those words of the statute is not permissible. . . . If we apply this principle in interpreting section 220 of the Act, we find that the condition precedent for invoking the said section is only if there is a default in payment of the amount demanded under a notice by the Revenue within the time stipulated therein and if such a demand is not satisfied then section 220(2) can be invoked." 6. Since the issue is squarely covered that no interest can be charged u/s. 220(2) of the Act for the period when there is no demand outstanding. In the present case also the demand arises from the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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