TMI Blog2005 (4) TMI 282X X X X Extracts X X X X X X X X Extracts X X X X ..... ra Rao. The brief facts of the case are that the assessment was originally completed under s. 143(3) r/w s. 158BC of the IT Act, 1961 on 31st Oct., 2002 where the AO charged interest under s. 220(2). The assessee subsequently filed petition under s. 154 contending that the interest charged under s. 220(2) for not paying self-assessment tax at the time of filing of return for the block period cannot be levied as no demand notice was served for the payment of the tax. The provisions of s. 220(2) came into effect only after the demand notice under s. 156 was issued and served. It was further contended that the provisions of s. 140A(3) are for the application of the s. 221(1) and not for the purpose of levy of interest under s. 220(2). The AO d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he amount specified in any notice of demand raised under s. 156 within the time specified under s. 220(1), i.e., within 30 days, the assessee has to pay simple interest @ 1 per cent p.a. every month or part thereof Thus, if there is default under s. 220(1), the interest under s. 220(2) will be leviable. 6. Our attention was drawn to s. 156. Sec. 156 deals with the notice of demand and accordingly it was stated that notice of demand has to be served on the assessee when any tax, interest, penalty found or any other sum is payable in consequence of any order passed under this Act. Thus, it was submitted that notice of demand is always in consequence of an order passed i.e., an assessment order precedes notice of demand. Therefore, there mus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh the orders of the authorities below. We find horn the facts of the case, in all these cases the AO has levied interest under s. 220(2) while determining tax liabilities of the assessee in the assessment order passed under s. 143(3) r/w s. 158BC/158BD of the IT Act. The assessee no doubt has returned undisclosed income in each of the case and has not paid tax to the extent of the undisclosed income, which the assessee was required to pay in view under s. 140A of the IT Act. Sec. 140A(3) treated the assessee to be an assessee-in-default, but does not make an assessee liable for the imposition of interest under s. 220 of the IT Act. We have gone through the provisions of s. 220. We find that the s. 220(1) imposes liability on the assessee t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee, merely an order determining the amount payable by the assessee towards the tax was passed, therefore, no interest can be levied under s. 220(2). Under s. 221 there is no provision for the imposition of the interest. 13. We have gone through the order of Hon'ble Supreme Court in the case of Vikrant Tyres Ltd. vs. ITO, we find that in this case the Hon'ble Supreme Court has clearly held that: "the condition precedent under s. 220 was that there should be a demand notice and there should be a default in paying the amount so demanded within the time stipulated in the notice. The assessee satisfied the demands under the notices issued under s. 156 and nothing was due pursuant to the notices of demand." 14. We, therefore, delete t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the computation of the income, therefore, no question of paying the fees on the basis of computation of total income made by the AO arise. 17. The learned Departmental Representative on the other hand submitted that the fees is to be paid on the basis of computation of total income as determined by the AO as liability to the interest is based on the total income as assessed by the AO. 18. We have considered the rival submissions and we find force in the submission of the learned Authorised Representative. The appeals before us relates to the matter relating to the levy of the interest under s. 220(2) The appeal does not relate to the income as assessed or computed by the AO. Since the appeal does not relate to the total income as det ..... X X X X Extracts X X X X X X X X Extracts X X X X
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