TMI Blog2012 (10) TMI 327X X X X Extracts X X X X X X X X Extracts X X X X ..... eady been issued to the assessee after completing the original assessment completed by the Dy. CIT(A), Gorakhpur. In these circumstances, there was no requirement in law to grant a further period of 30 days, after the service of the notice and thus it cannot be said that the demand has been raised for the first time on 3.1.2003. In these circumstances, no substance is found in the argument of assessee that interest under Section 234B, 234C and 220(2) could not have been charged before expiry of 30 days of serving the notice of demand - against assessee. - INCOME TAX APPEAL No. - 128 of 2004 - - - Dated:- 4-10-2012 - Sunil Ambwani And Aditya Nath Mittal, JJ. Petitioner Counsel :- S.D. Singh,R.R. Kapoor Respondent Counsel :- Govind Krishna (Delivered by Hon'ble Aditya Nath Mittal, J.) 1. This Income Tax Appeal has been preferred under Section 260A of the Income Tax Act, 1961, against the order of Income Tax Appellate Tribunal, Allahabad Bench, Allahabad dated 11.6.2004, passed in ITA No.316(Alld)/2003 for the A.Y. 1993-94. 2. The brief facts of the case are that the assessment was originally completed by DCIT(A), Gorakhpur. The CIT(A), Allahabad vide order dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee was not determined vide order dated 3.1.2003. Keeping in view the Dy. CIT(A) order dated 19.10.1993; CIT(A) order dated 22.9.1995 and ITDT order dated 29.8.2002, the calculation was made in compliance of the appellate orders. It is submitted that it was the the duty of the assessee to compute and pay the tax as per the provisions of the Act for the financial year 1993-94. The assessee has failed to calculate the correct gross profit rate on the sales which was finally decided by the Income Tax Appellate Tribunal, and accordingly the additions were made. The order of the Income Tax Appellate Tribunal dated 29.8.2002 was further challenged in Income Tax Appeal No.65 of 2003, which was dismissed in limine vide order dated 26.7.2007, therefore, the questions of additions on account of unexplained cash credit under Section 68 of the Income Tax Act and the enhancement of gross profit is are not in dispute in this appeal. 7. The Assessing Officer, after the decision of Income Tax Appellate Tribunal dated 29.8.2002, had issued fresh notice of demand and challan charging interest under Section 234B, 234C and 220(2) of the Income Tax Act, 1961. 8. The said order of A.O. dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest charged under section 220(2) of the I.T. Act. Therefore, the order of the CIT(A) on this issue is reversed and order of AO is confirmed. The appeal of the Revenue is allowed. 10. Learned counsel for the appellant has relied upon Income-tax Officer, Kolar Circle, Kolar and another Vs. Seghu Buchiah Setty, AIR 1964 SC 1473 and Central Provinces Manganese Ore Co. Ltd. Vs. Commissioner of Income-tax, (1986) 160 ITR 961 . 11. In Income-tax Officer, Kolar Circle, Kolar and another (supra), the majority and minority views were as under:- Per Sarkar and Hidayatullah, JJ.:- Where an appeal is preferred by an assessee against an order of assessment passed by the Income-tax Officer, and in the appeal the appellate order reduces the assessment, then the original assessment order is vacated. Consequently, the notice of demand served upon the assessee under S. 29. Income-tax Act, 1922 falls to the ground and the default based thereupon under S. 45 of the Act also ceases to be default anymore. In such a case, therefore, on the Income-tax Officer's order being revised in appeal the default based on it and all consequential proceedings must be taken to have been superseded and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etion to calculate or reduce interest under Section 139(8). Chapter XX of the Income Tax Act, 1961, also do not provide any right of appeal against interest levied under Sections 234B, 234C and 220(2) of the Income Tax Act. 15. Section 234B of the Income Tax Act, 1961, provides for interest for defaults in payment of advance tax. Section 234C provides for interest on deferment of advance tax. During the course of argument, learned counsel for the appellant has not pressed these points. 16. As far as the interest under Section 220(2) is concerned, it provides as under:- 220-(2) If the amount specified in any notice of demand under section 156 is not paid within the period limited under sub-section (1), the assessee shall be liable to pay simple interest at one per cent for every month or part of a month comprised in the period commencing from the day immediately following the end of the period mentioned in subsection (1) and ending with the day on which the amount is paid : Provided that, where as a result of an order under section 154, or section 155, or section 250, or section 254, or section 260, or section 262, or section 264, or an order of the Settlement Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the tax liability then that tax along with interest and penalty has to be deposited by the assessee subject to decision of appeal. In this case the return of the assessee was not accepted by the Assessing Authority and some additions were made. Ultimately those additions were confirmed by the ITAT as well as by this Court. In the circumstances, the tax as well as the advance tax liability accrued on the date of original assessment. The order dated 3.1.2003 by which notice of demand and interest has been claimed, cannot be said to be the determination of the income tax. It is merely recalculation of the income and the interest by way of execution of the orders of the appellate authorities which have attained finality. In the circumstances, the liability to pay tax had accrued on the date of original assessment for the assessment year 1993-94. 21. It is admitted that the original notice of demand under Section 156 of the Act, creating a demand of Rs.3,29,371/- dated 31.3.1995 on the assessed income of Rs.5,23,020/- was duly served upon the assessee on 8.5.1995. As per provisions of Section 220(1) of the Income Tax Act, the assessee was required to satisfy the demand within 30 da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lying upon the case of Bharat Commerce and Industries Ltd. vs. Union of India and others, 188 ITR 277 (Del.), in which Abdul Kareem Hajee (K.P.) Vs. ITO (1983) 141 ITR 120 (Kerala) and Mohammed Essa Moosa Sait Vs. GTO (1987) 167 ITR 338 (Kerala) has held that no appeal lies against the order of the A.O. for charging interest under Section 220(2) of the Income Tax Act. 27. The appeals and revisions are provided under Chapter XX of the Income Tax Act, 1961. Section 246 of the Act defines the appealable orders and contains a provision that any assessee aggrieved by any of the following orders of an Assessing Officer may appeal against such order. In this chapter there is no provision to file an appeal for the grievance against charging of interest under Section 220(2), 234B and 234C. Accordingly, the order of A.O. dated 3.1.2003 was not appealable before the CIT(A). 28. The CIT(A) should not have entertained an appeal against the order which was not appealable. In Vikram Tyres Ltd. Vs. First ITO, (2001) 247 ITR 821, Hon'ble Supreme Court has held that:- (i) that the condition precedent under section 220 was that there should be a demand notice and there should be a default in p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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