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2014 (11) TMI 223 - HC - Income TaxAlternate remedy available - Order of the Settlement Commission Demand of interest for delayed payment of tax u/s 220(2) Direction made to file revision in front of CIT - Held that:- In terms of Section 220, an assessee will be treated as an assessee in default when he does not pay the tax liability in respect of a demand raised by an demand notice u/s 156 - There is a difference between the interest payable u/s 220 and the interest payable u/s 234B, which deals with interest for defaults in payment of advance tax, as the interest u/s 220 continuous still all the outstanding demand including the interest is cleared, while Section 234B would be chargeable for short-fall in the payment of advance tax till the date of regular assessment - Therefore, the date of intimation under Section 143(1) of the Act would be relevant for the purpose of interest under Section 220 of the Act - the rationale behind the provisions of Section 220 of the Act to levy interest on delayed payment of tax is not to penalise the party but to make a provision for compensation for the department on the failure of the assessee to make payment on the first notice of demand. As pointed out in the case of Vikrant Tyres Ltd., vs. ITO [2001 (2) TMI 129 - SUPREME Court] - the condition precedent u/s 220 is that there should be a demand notice and there should be a default in paying the amount so demanded within the time stipulated in the notice - the communication dated 31.03.2008, is a consequence to the order passed by the Settlement Commission dated 18.03.2008 - Therefore, the interpretation given by the petitioner for computation of the period for the purpose of levy of interest cannot be adjudicated in a Writ Petition and the petitioner has to necessarily avail the remedy available under the Act thus, the petitioner is directed to file a Revision before the Commissioner of Income Tax under Section 264 of the Act Decided against assessee.
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