Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (12) TMI 399 - AT - Income TaxLevy of interest u/s. 220(2) - As per AO the interest u/s. 220(2) is attracted from the expiry of the period of 30 days from the issuance of the income tax computation form - HELD THAT:- As per provisions of section 220(2) and also to the circular No. 334 dated 03.04.1992 which says in unequivocal terms that where an assessment order is cancelled under section 146 or cancelled/set aside by an appellate/revisional authority and the cancellation/setting aside become final, no interest U/s. 220(2) can be charged pursuant to the original demand notice. The necessary corollary of this position will be that even when the assessment is reframed, interest can be charged only after the expiry of 30 days from the date of service of demand notice pursuant to such fresh assessment order. CIT(A) also followed the decision of Hindalco Industries Ltd. [2005 (8) TMI 533 - ITAT MUMBAI] where it was held that on set aside of assessment, operation of original assessment order stands withdrawn and the demand notice issued pursuant to such assessment order becomes inoperative and stands extinguished; and therefore, in a case where the assessment was set aside, interest u/s. 220(2) has to be charged only after expiry of 30 days from the date of service of demand notice pursuant to fresh assessment order but it shall not relate back to the date of the assessment order which was set aside. On a perusal of the circular referred to by the ld. CIT(A) and also the order of the Tribunal in Hindalco Industries Ltd. (supra), we are of the considered opinion that the legal position does not admit of any doubt and the issue is no longer res integra. It is clear that the interest u/s. 220(2) of the Act shall be levied with reference to the order passed subsequent to remand u/s. 254, but not with reference to the assessment order that stood set aside - Decided against revenue. Addition of prior period expenses - HELD THAT:- For expenditure on account of payment of bonus to the employees and on account of repairs and maintenance were incurred wholly and exclusively for the purpose of business. Absolutely, there cannot be any dispute on this aspect because it is born out of record. To this factual position, ld. CIT(A) obviously applied the law laid down by Hon’ble Apex Court in the case of Kedarnath Jute Manufacturing Co. [1971 (8) TMI 10 - SUPREME COURT] and reached a conclusion that such an expenditure is an allowable expenditure. We do not find anything illegality or irregularity in the conclusion reached by the ld. CIT(A) and accordingly, uphold the same. This ground of Revenue is dismissed.
|