9911796707
TMI Blog1982 (7) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... ome of the petitioner liable to be brought to tax to be Rs. 21,60,96,200. Along with the assessment order, a demand notice raising a demand of Rs. 4,36,03,414 was served on the assessee. The assessee, instead of paying the amount mentioned in the demand notice, addressed a letter dated 15th October, 1979, annex. C, pointing out various patent mistakes committed by the ITO. The assessee returned the demand notice to the ITO along with his request for rectification. In other words, the tax was not paid by the assessee as per the demand notice but instead the demand notice was returned pointing out certain patent errors committed by the ITO. It appears that thereafter, the ITO rectified the assessment order by virtue of s. 154 of the I.T. Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led to return the demand notice duly rectified to enable it to do so. He, therefore, submitted that in a case where the assessment order contains gross errors, the assessee could not be expected to pay the tax as per the demand notice. If that be so, counsel submitted, it would be unreasonable to expect the assessee to pay interest under sub-s. (2) of s. 220 of the Act. Section 156 provides that when any tax is payable in consequence of any order passed under the Act, the ITO shall serve upon the assessee a notice of demand in the prescribed form specifying the sum so payable. Section 220(1) says that any amount specified as payable in a notice of demand under s. 156 shall be paid within 35 days of the service of the notice. The law, theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adjustment has already been made pursuant to the rectification while issuing the order directing the assessee to pay interest on the tax amount which remained due after the expiry of the period of 35 days from the date of receipt of the assessment order under s. 156 of the Act. There can, therefore, be no doubt that the scheme of the aforesaid provision clearly envisages that immediately after an order of assessment is made and a notice of demand is served on the assessee, the latter must pay the tax amount as per the demand within the stipulated period of 35 days. It is not open to the assessee to return the notice of demand on the ground that he seeks rectification under s. 154 of the Act. If an order of rectification is made, the proviso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder the proviso to that subsection. Admittedly the tax amount after rectification which was a part of the amount demanded under the initial notice of demand remained with the assessee from 29th October, 1979, to 23rd January, 1980. The assessee utilised this amount during the aforesaid period and, therefore, if he is required to pay interest on the said amount under sub-s. (2) of s. 220 of the Act, can it be said that the ITO is unreasonable or for that matter the law is unreasonable when he/it expects the assessee to pay simple interest at 12 per cent. per annum on the said amount. In our opinion, even though at first blush it may appear that the order is unduly harsh, in fact it is not inequitable as was urged by Mr. Shah. In para. 4 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovided that ....... no appeal shall lie against an order under sub-section (1) of section 46 unless the tax had been paid. Such conditions merely, regulate the exercise of the right of appeal so that the same is not abused by a recalcitrant party and there is no difficulty in the enforcement of the order appealed against in case the appeal is ultimately dismissed. It is open to the legislature to impose an accompanying liability upon a party upon whom a legal right is conferred or to prescribe conditions for the exercise of the right. " In the instant case also even if the law had prescribed that no application for rectification would be entertained unless the tax is paid, that would be a condition for availing of the right to have the or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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