TMI Blog2002 (10) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... mendment) Act of 1987, with effect from April 1, 1989. - The limitation under section 231 so far as the interest is concerned applies only with reference to the date of demand. Since the date of demand itself is taken as the proceedings for recovery, the question of limitation does not apply at all in this case. Therefore, the assessee cannot contend that the assessee was an "assessee in default" and the limitation for recovery of interest has to be reckoned from the commencement of the financial year. - - - - - Dated:- 3-10-2002 - Judge(s) : G. SIVARAJAN., C. N. RAMACHANDRAN NAIR. JUDGMENT The judgment of the court was delivered by C. N. RAMACHANDRAN NAIR J.-The assessee-appellant is a society which made payment to a contractor a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee, and Sri P. K. R. Menon, senior standing counsel for the Revenue. Counsel for the assessee relied on the above two decisions of this court and contended that when the assessee was an assessee in default, limitation has to be worked out from the end of the financial year in which the assessee was treated as an assessee in default. Admittedly, if the assessee has to be treated as an assessee in default and if section 231 applies, then of course the finding of the first appellate authority that the demand of interest for the period from April 1, 1986, to March 31, 1990, is barred by limitation will stand because the limitation in such a case has to be worked out from the last day of the financial year in which the assessee is deemed to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for default in payment of such tax also cannot be demanded. Obviously in a case where tax is not payable, the interest payable for default in payment of such tax also does not arise because interest has to be calculated for the period of default, i.e., till the date of payment. Therefore, if tax is not payable, obviously interest will not be payable for the default in payment of such tax. However, in this case the assessee has admittedly paid the tax though with delay and, therefore, the assessee was an assessee in default from the due date till date of payment and thereafter it will cease to be an assessee in default. We feel section 231 cannot be applied to the assessee because section 201 speaks about treating the assessee as a defaulte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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