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2022 (11) TMI 1037 - DELHI HIGH COURTLevy of interest u/s 220(2) - Revenue demanded interest on the amount refunded to the Assessee - since the tax liability of the Assessee remained the same even after the matter was remanded by the ITAT to AO for fresh consideration and the addition remained under the same head, the Assessee is liable to pay interest in relation to the demand issued pursuant to the original assessment order - contention of the Revenue that the Assessee is liable to pay interest in relation to the demand issued pursuant to the original assessment order, if on a remand, the addition remained under the same head has no basis in law - HELD THAT:- In the present case there was no default by the Assessee as the assessment order dated 28th December, 2006, was set aside by the ITAT and therefore no liability to pay interest can arise under Section 220 (2) of the Act. The demand for interest raised by the AO is contrary to the Circular issued by CBDT as well as the mandate of Section 220(2). The Section 220(2) does not empower the revenue to demand interest relating back to a set aside order, when a fresh assessment order has been passed thereafter. The facts of the present case are clearly covered by para 2.1 of the said CBDT circular which anticipates the situation that has arisen in the present proceedings and therefore, the CIT(A) and the ITAT have correctly held that the levy of interest by the AO relating back to the set aside assessment order, was incorrect and have correctly ordered the same to be deleted. Thus, this Court sees no merit in the appeal and accordingly, the same is dismissed.
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