9911796707
TMI Blog2002 (9) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... finally determined was fully adjusted on the same date when the final order was passed? 2. Whether, on the facts and circumstances of the case, the Appellate Tribunal was right in law in coming to the conclusion that the surtax demand continued to exist from the original assessment even though the final liability to tax had resulted as a consequence of revision of income-tax assessment?" The assessee is a company engaged in the manufacture of papers and boards. It was assessed under the Companies (Profits) Surtax Act, (the Act) for the assessment year 1976-77 on September 4, 1979. That was followed by a demand notice for Rs. 4,54,823 being the amount of tax levied under that assessment. The company, being aggrieved by the manner at which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 220(2) and for the belated payment of surtax levied interest from October 1, 1979 to October 31, 1990. Even though the sum of Rs. 1,42,924 which has been assessed under the Surtax Act under the order dated March 30, 1988, had been fully adjusted from the refund which was then due to the assessee, the order made on November 20, 1990, proceeded to state that interest of Rs. 2,22,957 along with surtax of Rs. 1,42,924 has been completely adjusted against the surtax refund due in the assessment year 1975-76 as per the revised order dated March 30, 1988. The assessee went up on appeal against that order to the Commissioner who allowed the appeal. Thereafter the Revenue went up in appeal to the Tribunal against the order of the Commissioner. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der as the tax payable was straightaway adjusted even at the time of the assessment against the surtax refund due for the assessment year 1975-76. No question of non-payment of any outstanding demand arose. The question of issuing a notice of demand also did not arise and no notice was in fact issued. The further order made in the year 1990 was wholly misconceived. There was no notice of demand which had remained without compliance and out standing as on that date. In fact, there was no such notice of demand out standing even as of 1988 when the amount of the tax was determined at Rs. 1,22,924. The condition precedent which could attract section 220, sub-section (2) were absent. The adjustment made by the Revenue of the amount determined b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ashed notice gets restored by an order of a higher forum. In such a situation, section 3 of the Validation Act restores the original demand notice which was never satisfied by the assessee and the said section does away with the need to issue a fresh notice." In this case there was no question of any revival of a demand as the order made by the Assessing Officer on April 16, 1980, giving effect to the order in appeal was not required to be altered by reason of any further challenge to the appellate order. That appellate order itself has become final. Section 3 of the Validation Act therefore would not help to revive the notice. Our answers to the questions referred must therefore be and are in favour of the assessee and against the Revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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