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TMI Blog2014 (12) TMI 263X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 2,57,680/- but an assessment was made on a total income of Rs. 9,14,115/- on 23/09/1976. The Assessing Authority (for short, "AO') issued demand notice as also other forms and charged interest u/s 139(8) and interest u/s 215 after specifically observing in the order as to levy of interest. The assessee preferred appeal and after the order of the Appellate Assistant Commissioner, the income was reduced to Rs. 2,41,120/- 4. The revenue preferred an appeal before the ITAT, and after the order of ITAT the total income finally determined came to Rs. 4,29,120/-. The AO gave effect to the order of the ITAT and by order dt.16/09/1980 enhanced tax ,based on the order of the ITAT so also charged interest u/s 139(8), 215 and u/s 220(2) of IT Act. The assessee moved an application u/s 154 by agitating levy of interest, u/s 139(8), 215 and 220(2) of the IT Act, which was rejected by the AO so also appeal by the Commissioner of Income Tax (Appeal) (for short, 'CIT(A)'). However, the ITAT vide its order dt. 15/01/1988 allowed the appeal of the assessee by holding that interest, in so far as Sec. 220(2) is concerned, was not leviable. However, the ITAT, in the impugned order, thoug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellate/second appellate authority, the order would be revisable only by reduction/enhancement of tax and once there is reduction/ enhancement of the tax, interest under the aforesaid provision would be consequential. In support of his submission relied upon judgment of the Delhi High Court in the case of Girnar Investment Ltd. Vs. Commissioner of Income- Tax and another, reported in (2012) 340 ITR 529 (Delhi) which has correctly dealt with this issue. 9. Per-contra, ld. counsel for the assessee contended that the sections. 139(8), 215 and Sec. 220(2) clearly specify that, if there is reduction, then the interest can be reduced but if there is enhancement of tax, the provision does not empower to revise the interest detrimental to its interest. He further contended that u/s 156, a demand notice is required to be issued after every order is passed and in the instant case, the demand notice u/s 156 has been issued at the time of the original assessment only and not subsequently at the time of modification of the order and submits that the levy itself is bad and unjustified. He further contended that plain and simple language of the Act is required to be considered rather than the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ake a reference to this Court, in our view, on such administrative instructions the appeal of the Department should not be dismissed or the reference should not be rejected. We do not find any infirmity in disposing of the appeal on the merits." 13. This Court again, in the case of Commissioner of Income Tax. Vs. Registhan (P) Ltd. (2003) 185 CTR 283, also came to the said conclusion of disposal on merits. 14. This Court, in the case of Commissioner of Income Tax Vs. Registhan (P) Ltd.: (2004) 186 CTR 260, again held that if the department wants to file reference application, this Court should entertain despite tax amount involved being minimal and directed the Tribunal to refer the question at the instance of this Court. 15. Punjab and Haryana High Court (Full Bench) also, in the case of Commissioner of Income-Tax Vs. Varindera Construction Co.: (2011) 331 ITR 449 (P&H), after analyzing the judgments and the circular of the CBDT, came to the conclusion that the circular, laying down monetary limit, controls filing of the appeals but not their hearing. The appeals, filed as per the applicable limit, at the time of filing, cannot be governed by the circular applicable at the time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest and after the first appellate order at the instance of the assessee, the tax got modified and at the instance of the revenue, the income was further modified at a higher figure of income by ITAT. 20. Therefore, in our view, the subsequent orders are integrated and extension of the original proceedings and fresh notice u/s 156, as contended by ld. counsel for the assessee, need not be issued every time when the total income undergoes a change due to appeal or revisional orders. Sec. 3 (b)(iii) of the Validating Act provides that any proceeding initiated on the basis of the notice of demand served upon the assessee before disposal of the appeal or other proceedings may be continued in relation to the amount so reduced from the stage at which such proceedings stood immediately before such disposal. 21. In our view, the moment there is finality of the proceedings, the original notice of demand comes to the surface and for any default on the part of the assessee, the claim of interest can be revived from inception. In our view the scope of proviso to Sec. 220(2) of the Act, the notice of demand, relates back to the original notice of demand. The Tribunal was at error while co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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