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2014 (7) TMI 209 - AT - Income TaxInterest levied u/s 220(2) of the Act - Whether interest u/s 220(2) shall arise on a demand, originally satisfied and, accordingly, refunded to the assessee following the order/s by an appellate forum, since revived by an order/s by a higher forum – Held that:- The matter has been settled by the decision in Vikrant Tyres Ltd vs. ITO [2001 (2) TMI 129 - SUPREME Court] - the condition precedent for invocation of section 220(2) is that there should be a demand notice (DN) and, further, a default in paying the amount so demanded - the demand notice stands satisfied in full within the time stipulated, there is no revival of demand upon a subsequent restoration by a higher appellate forum of the assessment in whole or in part, and a fresh notice of demand would be required to be issued toward recovery of the demand reviving subsequently - there is no question of levy of interest from the date immediately following the due date of payment as per the original demand notice. Where a demand notice has not been discharged in full, interest from an anterior date shall arise only to the extent the demand as finally arising is relatable to such unpaid/un-discharged demand - the liability to interest u/s 220(2) arises for such period, i.e., for which the demand actually outstands, when the whole or a part of the said demand becomes due for the payment in subsequent proceedings –thus, the working of interest u/s 220(2) of the Act is directed – Decided in favour of assessee.
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