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2015 (3) TMI 13 - HC - Income TaxInterest under Section 220(2) - Power of settlement commission - whether be legally leviable from the date of default in payment of demand by the assessee till the date of admission of application by the assessee by settlement Commission under section 245D(1) and not till the final order of settlement commission under section 245D (4)? - Held that:- Section 220 and 245D and the legal position as emerging from the decision referred to above namely, CIT vs Damani Brothers reported [2002 (12) TMI 11 - SUPREME Court], held that interest under Section 220 (2) would be legally leviable from the date of demand raised in assessment before admission of application for settlement under section 245D (1). However, if the demand stands reduced under order of Settlement Commission, interest would undergo revision correspondingly. The position as far as charging interest under Section 220 (2) is concerned is no longer res integra. It has been made clear under the decision in the case of Damani Brothers (supra) as also in the decision of Brij Lal and Ors v. Commissioner of Incometax reported in [2010 (10) TMI 8 - SUPREME COURT ] observing till the Settlement Commission decides to admit the case under section 245D (1) the proceedings under the normal provisions remain open. But, once the Commission admits the case after being satisfied that the disclosure is full and true then the proceedings commence with the Settlement Commission. In the meantime, the applicant has to pay the additional amount of tax with interest without which the application for settlement would not be maintainable. Thus, interest under section 234B would be payable up to the stage of section 245D (1) - Decided against revenue.
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