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TMI Blog2019 (5) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... regard to the amounts of ₹ 1,50,064/- and ₹ 3,58,877/- which two figures did not tally with the total of ₹ 4,54,566/-. Such re-computation at the hands of the Assessing Authority, pursuant to the remand of the learned Tribunal, will not amount to setting aside the Assessment Order altogether. No fresh determination of the tax liability was to take place upon such remand by the learned Tribunal. Question of suspension of the levy of interest for the interim period, upon the order passed by the Tribunal dated 24.08.2004 upto 22.03.2006, when a fresh Assessment Order was passed by the Assessing Authority, could not arise. Circular No.334 dated 03.04.1982 had no application to the facts of the present case and therefore, the contention of the learned counsel for the Assessee raised before us, is devoid of merit. Order under Section 220(2) as such, namely, adding of interest of ₹ 10,05,030/- in the Appeal Effect Order dated 22.03.2006 was per se appealable. Such provision is not included in the category of 'Orders Appealable' u/s 246A. If the levy itself is challenged, the levy of interest consequentially could only be challenged and if the tax l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Appeal Effect Order dated 22.03.2006 amounting to ₹ 10,05,030/- which was imposed in the Original Assessment Order dated 15.03.1999 for the Assessment Year 1991-1992 in question. She relied upon the Circular of the Central Board of Direct Taxes, in Circular No.334 dated 03.04.1982 and submitted that if the Assessment Order is cancelled under Section 146 or set aside by an Appellate / Revisional Authority and that cancellation / setting aside becomes final, then, interest under Section 220 if any, can be charged only after a fresh demand notice upon fresh assessment re-framed in pursuance of such remand by the Higher Appellate Authority. She also relied upon the decision of the Rajasthan High Court in the case of Commissioner of Income Tax vs. Rajesh Kumar Dinesh Kumar in (2010) 325 ITR 346. 4.Learned counsel for the Revenue, however submitted that the order imposing interest under Section 220(2) of the Act is not even appealable before the Commissioner of Income Tax (Appeals) in view of Section 246A of the Act, which enumerates various orders against which the appeal lies before the Commissioner of Income Tax (Appeals) and none of the clau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 245D, the amount on which interest was payable under this section had been reduced, the interest shall be reduced accordingly and the excess interest paid, if any, shall be refunded : Provided further that in respect of any period commencing on or before the 31st day of March, 1989 and ending after that date, such interest shall, in respect of so much of such period as falls after that date, be calculated at the rate of one and one-half per cent, for every month or part of a month. 7.The Tribunal, vide its earlier order dated 24.08.2004 , had made the following observations, while remanding the matter to the Assessing Authority: 8.The learned counsel for the Assessee, on the other hand submitted that as per the decision of the Tribunal relied upon by the CIT (Appeals), the actual expenditure was ₹ 4,54,566/- for the asst.year under consideration, apart from ₹ 1,50,064/- debited to the trading account and claimed as relief in a sum of ₹ 3,58,877/- as allowable expenditure. 9.We have heard the rival parties and perused the record. Even as pointed out by the learned counsel for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d attention to Circular 334 dated 3/4/82 which states that no interest u/s.220(2) can be levied when the order of the Assessing Officer is set aside by the Appellate authority. The AR has also produced the copy of the said circular, a portion of which is as under:- Levy of interest u/s.220(2) when the original assessment is set aside instructions regarding... Where an assessment order is cancelled under Section 146 or cancelled / set aside by an appellate / revisional authority and the cancellation / setting aside becomes final (i.e.it is not varied as a result of further appeals / revisions), no interest under Section 220(2) can be charged pursuant to the original demand notice. 5.I have gone through the facts and circumstances of the case. I have gone through the written submissions and the circular No.334 dated 03.04.1982 submitted by the appellant. After careful consideration, I am of the view that interest u/s.220(2) of the I.T.Act, has wrongly been levied by the Assessing Officer. I hereby delete the interest of ₹ 10,05,030/- levied u/s.220(2) of the I.T.Act. Thus, the appellant succeeds on this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Assessee is devoid of merits and the question of law framed above deserves to be answered against the Assessee and in favour of the Revenue. The reasons are as follows: Firstly, the levy of interest under Section 220 of the Act quoted above, is consequential and the interest is payable if the Assessee fails to pay the tax payable as determined in the Assessment Order and a Notice of Demand is issued to the Assessee under Section 156 of the Act. The levy of interest naturally therefore, depends upon the levy of tax itself. If the above Assessment Order is set aside or set at naught and the Assessing Authority is required to pass fresh Assessment Order, then naturally unless the tax liability is re-determined by the Assessing Authority, the question of interest as determined in the earlier Assessment Order, which has been set aside by the Tribunal, cannot arise. 11.Thus, in this context only, the Board seems to have issued Circular No.334 on 03.04.1982, which is quoted below for ready reference: 1211.Levy of interest under sub-section (2) when original assessment is set aside / cancelled 1.Doubts have been raised as to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res did not tally with the total of ₹ 4,54,566/-. Therefore, such re-computation at the hands of the Assessing Authority, pursuant to the remand of the learned Tribunal, will not amount to setting aside the Assessment Order altogether. No fresh determination of the tax liability was to take place upon such remand by the learned Tribunal. Therefore, the question of suspension of the levy of interest for the interim period, upon the order passed by the learned Tribunal dated 24.08.2004 upto 22.03.2006, when a fresh Assessment Order was passed by the Assessing Authority, could not arise. Circular No.334 dated 03.04.1982 had no application to the facts of the present case and therefore, the contention of the learned counsel for the Assessee raised before us, is devoid of merit. 13.Secondly, we also do not find that the order under Section 220(2) of the Act as such, namely, adding of interest of ₹ 10,05,030/- in the Appeal Effect Order dated 22.03.2006 was per se appealable. Such provision is not included in the category of 'Orders Appealable' under Section 246A of the Act. If the levy itself is challenged, the levy of interest consequentially could ..... X X X X Extracts X X X X X X X X Extracts X X X X
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