TMI Blog2005 (8) TMI 536X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act ] in all these appeals is almost identical. 2. The relevant and material facts for the disposal of the issue under consideration before us are that in all these cases, assessments were completed under section 143(3)/148 of the Act on 20-3-1997. Notice of demand under section 156 of the Act for the amount mentioned in the respective assessment years was issued by the Assessing Officer, but the assessee did not pay the tax and preferred appeals before the CIT (Appeals), who allowed some relief to the assessee by partly allowing the appeals. Consequently the Assessing Officer gave appeal effect and reduced the demand on the assessee and charged interest under section 220(2) of the Act. Subsequently, ITAT set aside the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r contended that in the instant cases, except in assessment year 1993-94, in the final orders dated 11-7-2004 passed by the Assessing Officer under section 154 of the Act, either no demand was raised against the assessee or a refund was given to the assessee, so atleast for these assessment years 1990-91 to 1992-93 no interest under section 220(2) of the Act should be charged against the assessee. Another argument advanced by the ld. AR before us is that if the Tribunal concludes that the assessee is liable to pay interest under section 220(2) of the Act then the period from the date of order passed by the CIT (Appeals) till the date of the order of ITAT is to be excluded from the period for charging interest under section 220(2) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in part or wholly, the interest payable under section 220(2) will be computed with reference to the due date reckoned from the original demand notice and with reference to the tax finally determined. The fact that during an intervening period, there was no tax payable by the assessee under any operative order would make no difference to this position." 6. We have considered the relevant rival submissions of both the parties, perused the record and carefully gone through the orders of the tax authorities below as well as the case law cited ( supra ). Undisputedly in all the instant appeals, the Assessing Officer charged interest under section 220(2) of the Act when the assessee failed to make the payment against the demands raised by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e under section 220(2) of the Act would still be computed only with reference to the due date reckoned from the original demand notice as well as with reference to the tax finally determined in view of the order of the appellate authority, i.e. , in the instant cases the ITAT. The contention of the learned AR for excluding the period when the appellate order of the CIT (Appeals) in favour of the assessee creating no demand against him was under operation is rejected in the light of the Circular ( supra ) passed by the CBDT. We shall now consider this contention in view of the ratio of the decision of the Apex Court in the case of Vikrant Tyres Ltd. ( supra ) referred to by the learned AR for the assessee. The relevant portion of the deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me stipulated therein. The question, therefore, is whether the revenue is entitled to demand interest in regard to the amount which was refunded to the assessee by virtue of the judgment of the appellate authority and which was repaid to the revenue after decision in the reference by the High Court on fresh demand notices being issued to the assessee? Admittedly, on a literal meaning of the provisions of section 220(2) of the Act, such a demand for interest cannot be made. The High Court by a liberal interpretation of the said section and relying upon section 3 of the Valuation Act has held that the revenue is entitled to invoke section 220(2) of the Act for the purpose of demanding interest on such retention of money. We are not in agree ..... X X X X Extracts X X X X X X X X Extracts X X X X
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