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M/s. Precot Meridian Ltd. Versus Assistant Commissioner of Income Tax

2015 (10) TMI 1502 - ITAT CHENNAI

Levy of interest under section 220(2) - selection of date to levy interest - Held that:- The Assessing Officer has levied interest under the provisions of section 220(2) from the date of passing of the original assessment order whereas the original assessment order was set aside by the Tribunal and the same was remitted back to the Assessing Officer for deciding the matter afresh. Since a fresh assessment order has been passed by the Assessing Officer, the demand notice period specified under se .....

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rther fortified by the Hon’ble Bombay High Court in the case of CIT Vs. Chika Overseas (P) Ltd. (2011 (11) TMI 118 - BOMBAY HIGH COURT ) and Vikrant Tyres Ltd. (2001 (2) TMI 129 - SUPREME Court). In view of our above finding, this ground of appeal of the assessee is allowed.” The period specified under section 220(1) has to be taken into consideration from the date of passing of the fresh assessment order and not the earlier assessment order, which has been set aside. Accordingly, this issue is .....

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ee in both these appeals is that Commissioner of Income Tax (Appeals) erred in confirming levy of interest under section 220(2) of the Act. 2. Brief facts are that assessments for the assessment years 1995-96 and 1997-98 were completed under section 143(3) of the Act disallowing expenditure on replacement of machinery. Assessee preferred appeals before the Commissioner of Income Tax (Appeals) who confirmed the assessments in disallowing such expenditure. Further appeals were filed before the Tri .....

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y could not be considered as revenue expenditure applying the decision of the Hon ble Supreme Court in the case of Mangayakarasai Mills Pvt. Ltd. (315 ITR 114) consequent to the order of the Commissioner of Income Tax (Appeals) the Assessing Officer passed order levying interest under section 220(2) of the Act from the date of original assessment order. The assessee preferred appeal before the Commissioner of Income Tax (Appeals), who confirmed the levy of interest under section 220(2) of the Ac .....

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the order is placed before us. 4. Departmental Representative vehemently supports the orders of lower authorities in charging interest under section 220(2) of the Act from the date of original assessment order. 5. Heard both sides. Perused orders of lower authorities and the decisions relied on. The co-ordinate Bench of this Tribunal in assessee s own case considered a similar issue for the assessment years 1994-95 &1999-2000 holding as under:- 5. The second ground raised by the assessee in .....

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for the period of 35 months from 1.2.2009 to 31.12.2011. 13. The counsel for the assessee has submitted that since the original assessment order was set aside and the Tribunal had remanded the matter back to the Assessing Officer for deciding the issue afresh after taking into consideration the judgement passed by the Hon ble Supreme Court of India, interest under section 220(2) cannot be levied from the date of original assessment order i.e. dated 30.12.2008. Whereas the learned DR has vehemen .....

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ssued under section 156 cannot be considered to be an order. Therefore, if any mistake has occurred therein, it can be corrected by an administrative order. Any order passed by Income Tax Officer under section 154 for rectifying any mistake in the original demand notice under section 154 is non-est in the eye of law. Therefore, no appellate proceedings lie against such order. The ratio laid down by the Hon ble Madras High Court in the case of Suresh Gokuldas (supra) is not applicable in the fact .....

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partment has clarified that where an assessment order is cancelled u/s.146 or cancelled/set aside by an appellate/ revisional authority and the cancellation/setting aside becomes final, no interest under section 220(2) can be charged pursuant to the original demand notice. The necessary corollary of this position will be that even when the assessment is reframed, interest can be charged only after the expiry of 35 days from the date of service of demand notice pursuant to such fresh assessment o .....

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