TMI Blog2023 (10) TMI 335X X X X Extracts X X X X X X X X Extracts X X X X ..... tion and Validation of Recovery Proceedings) Act, 1964 shall apply, meaning thereby, interest has to be payable from the original demand notice - HELD THAT:- In the light of the aforesaid divergent views, we have carefully gone through the order dated 23.01.1992 of CIT(A). No doubt in para-5 of the order the said authority mentioned as if it was necessary to set aside the assessment order. However, the said observation cannot be read in isolation. On the other hand, when the entire order was read in conjunction, as rightly observed by the tribunal, the CIT(A) gave main thrust on the computation of capital gain and interest addition. In that view, it cannot be contended that the said authority wanted to expunge the entire assessment order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see from the original Assessment Order dated 25.03.1991 of the AO but not on the subsequent consequential order dated 28.03.1994 passed by him in the light of the order dated 23.01.1992 of Commissioner (Appeals). Aggrieved, the assessee filed M.P. No.2/vizag/2009 seeking rectification of the order in ITA No.679 on the contention that the original assessment order dated 25.03.1991 was no more in vogue in view of the order dated 23.01.1992 passed in appeal by the CIT(A) and during the pendency of the appeal before the said authority, stay of collection of demanded tax was granted and therefore the assessee / appellant cannot be treated as assessee in default in respect of the demanded tax in terms of Section 220(6) of the IT Act, 1961. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion: (i) Whether the Tribunal is correct in holding that the interest under Section 220(2) is chargeable from the date of the demand notice dated 25.03.1991 that was set aside and ignoring that no tax is payable as per the order of the commissioner of Income Tax (Appeals) ? (ii) Whether the tribunal is right in holding that despite the fresh demand notice dated 28.03.1994 issued after completion of the assessment as directed by the Commissioner, the liability for interest under Section 220(2) arises from 25.03.1991? (iii) Whether the Tribunal is correct in holding that the interest under Section 220(2) is chargeable from the date of the demand notice dated 25.03.1991, although the appellant was not assessee in default in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he capital gains. 7. Subsequently, the DCIT passed the consequential assessment order dated 28.03.1994 and gave effect to the appellate order and determined the additional compensation at Rs.62,61,883/- and interest on additional compensation at Rs.9,51,341/-. He collected some amounts and as the demanded amount as per the original assessment order dated 25.03.1991 was not paid, the AO charged interest U/s 220(2) of the IT Act reckoning from the original date of demand i.e., 25.03.1991. 8. After turn of some events, the assessee filed ITA No.149/02-03 before the CIT(A) and the date of computation of interest is concerned, the CIT(A) in his order dated 18.07.2002 has observed that in the earlier order dated 23.01.1992 the then CIT(A) h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 96 and there was default on his part and hence the provisions of validation Act applies in the instant case and consequently interest is chargeable from the date of original demand notice in terms of Section 220(2) of the IT Act. The tribunal accordingly allowed the appeal filed by the Revenue and set aside the order dated 18.07.2002 passed by CIT(A). 10. Thus we have divergent interpretations on the order dated 23.01.1992 passed by CIT(A). While the subsequent CIT(A), in his order in ITA No.149/02-03 dated 18.07.2002 opined that the entire assessment was set aside in the order dated 23.01.1992, in oppugnation, the tribunal in its order dated 17.10.2008 in ITA No.679/2002 held that the CIT(A) did not set aside the entire assessment order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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