9911796707
TMI Blog1997 (9) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... ly. On appeal, to the Commissioner of Income-tax (Appeals) by the petitioner the assessment order was set aside with certain directions. On second appeal, the Tribunal found that there was no need for setting aside the assessment, allowed the appeal partly and directed the Assessing Officer to recompute commission income and bring to tax the interest from banks. The Tribunal's orders were given effect to and the total income and tax were finally determined. Thereafter the Deputy Commissioner levied interest under section 220(2) of the Act for the delay in payment of tax for the above years. The details of levy are as follows : ------------------------------------------------------------------------------------------------------------------ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng and therefore there is no question of any default in payment of the demand so long as a new demand is raised after passing the fresh assessment order. The Commissioner found that in case the assessee had paid the tax in pursuance of the original demand of tax, there may not be tax due till the demand is revived. In this case the petitioner had not made any remittance at all. Thereafter, the original demand continues and there is a reduction of demand when the case was finally decided by the Tribunal. The Commissioner of Income-tax referred to and followed the decision of New Woodlands v. CIT [1982] 138 ITR 795. Section 220(2) of the Income-tax Act which is relevant for the purpose of this case states as follows : "If the amount specifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any amount paid on the basis of such demand was immediately refundable. Where such refund is not made within the time stipulated, the interest accrues in favour of the assessee. Repelling the said argument, this court held that the notice of demand remains valid and effective to the extent that the tax is finally determined to be due and payable by the assessee. According to the learned judge, the enforceability of the notice of demand is qualified by and subject to the fresh determination of the liability. What is required by an order of remand is not to refund the money collected as per the original order, but to recompute the amount of tax that is payable by the assessee. The original assessment is annulled not with a view, to refund bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may not be justified in demanding the interest from the date of the original notice. But where the assessee had not paid the tax as per the original demand notice, the amount on which the interest was payable would have reduced according to the subsequent order consequent on the appeal. That is the import of the proviso to sub-section (2) of section 220 of the Income-tax Act in the light of the Supreme Court decision in CIT v. Chittoor Electric Supply Corporation [1995] 212 ITR 404, approving the decision of the Kerala High Court in New Woodlands v. CIT [ 1982] 138 ITR 795. Therefore, the petitioner is liable to pay interest as per section 220(2) read with the proviso of the Income-tax Act. For all these reasons, the grounds raised by the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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